The gold price has rallied sharply in today’s trading session on the back of US dollar weakness, which gives it a positive direction heading into tomorrow’s job figures from the US.
The greenback was weaker against most of the major assets and currencies, especially the British pound which rose sharply after reports that a financial deal between the UK and EU regarding Brexit was complete and may be the beginning of a complete deal.
"Precious metals are seeing buying interest as the U.S. dollar index is posting sharp losses today," Kitco Metals senior analyst Jim Wyckoff said in a note.
"Traders stepped in to buy the dip in gold prices on some perceived bargain hunting and by some short covering from the futures traders."
Tomorrow’s non-farm payrolls figure is immensely important for gold as a good figure will almost guarantee the US Federal Reserve raises interest rates next month which is going to cause even further losses in the stock market that some already say is headed for a bear market.
"The rolling bear market continues to make progress and there is growing evidence that it is morphing into a proper cyclical bear market in the context of a secular bull," wrote Michael Wilson from Morgan Stanley
"We think the evidence is building and the message from Mr. Market is clear: the consensus outlook for earnings growth is too rosy next year." He added.
A declining stock market is always good for gold as investors look for somewhere safe to ride out the uncertainty.
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