Slumping Greenback Boosts Gold To 12-Mo. High

New York (Sept 7)  Gold prices were ending the U.S. day session higher and hit a 12-month high Thursday. The yellow metal was supported by a rapidly wilting U.S. dollar against the major currencies. The U.S. dollar index dropped to a 2.5-year low today. Bullish charts continue to invite technically based buying in both the gold and silver markets. December Comex gold was last up $10.40 an ounce at $1,349.40. December Comex silver prices hit a four-month high today and were last up $0.19 at $18.10 an ounce.

A sharp rise in weekly U.S. jobless claims, reported today, also gave upside momentum to the precious metals market bulls. The weekly report falls squarely into the camp of the U.S. monetary policy doves, who do not want to see a Fed rate hike any time soon.

A major economic data point of the week was today’s European Central Bank monetary policy meeting, including a press conference from ECB President Mario Draghi. The ECB did not make any changes in interest rates or monetary policy. No changes were expected by the marketplace.

Draghi did make some dovish comments that the present ECB monetary policy will be in effect until at least December, and maybe beyond that. However, other remarks by Draghi were perceived to suggest the ECB will start to tighten monetary policy in January. The Euro currency hit a more than 2.5-year high after the ECB meeting and Draghi’s comments.

Sellers in the gold and silver markets remain very timid late this week. While no new developments have occurred the past couple days regarding the U.S.-North Korea stand-off, it’s only a matter of time before a flare-up is likely to occur. Such notions will continue to support buying interest in the safe-haven gold market.

Technically, December gold futures prices closed nearer the session high today. The gold bulls have the solid overall near-term technical advantage. Prices are in a steep two-month-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,378.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,307.00.

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