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  • Gold was climbing from a low of $1,495.98 to a high of $1,519.70 , up over 0.5% on the day.
  • December Silver actually dropped from the highs and ended slightly lower by 0.04%.

Precious metals extended gains on a spot basis on Thursday with  further selling in the stock markets and in the Greenback following additional evidence that the US economy  is slowing.  Spot Gold was climbing from a low of $1,495.98 to a high of $1,519.70 , up over 0.5% on the day while Silver added 0.3% having climbed from $17.46 to a high of $17.79.    Both metals were off their highs into the close as investors bought into the lower levels of US benchmarks in the belief that the Fed would come to the rescue sooner than later.    

The US data of late has demonstrated the impact of prolonged trade wars and how the US economy is not isolated from a global economic slowdown.  Both key ISM surveys have pointed to a major slowdown in US growth rates and tomorrow’s Nonfarm Payrolls could well be the straw that broke the camel’s back and a nail in the coffin for the US Dollar, yet again, supportive of the bullish case for precious metals.  

As for futures, December gold on Comex rose $5.90, or 0.4%, to settle at $1,513.80 an ounce, extending the 1.3% gain on Wednesday while December Silver actually dropped from the highs and ended slightly lower by 0.04%, to $17.676 an ounce having added 2.2% in the prior session.

Nonfarm Payrolls is critical

“While the weak factory gauge lends strength to our view that the Fed is still set to cut rates in October, it has likely not locked in the interest rate reduction just yet, with the market only pricing a 75% likelihood of an imminent cut, which has risen from 67% as of yesterday’s open,” analysts at TD Securities explained.

 “Tomorrow’s jobs report will be key as a particularly weak print could to lock in the October cut and could also prompt a change in language about the prospect of future cuts. In this context, money managers have once again taken to gold’s warm embrace, while gold continues to benefit from CTA flow which is adding to selling pressure in equities.”

Gold levels:

Having recovered from below a 50% mean reversion of the late June swing lows to recent highs around 1460/70, bulls have made three days of consecutive gains this week

closing above the  1500 psychological figure and advancing towards 1520 ahead of a  1535 resistance level. Bulls will then look to the 1,550 target ahead of 1,590 as the 127.2% Fibo target. On the flip side, should bears take back control, gold prices can deteriorate all the way back to  the 19 July swing highs down at 1452.93. Eyes will then be on the  61.8% Fibo of the same range  at 1449.56 ahead of a full 100% retracement to 1380.

Silver levels:  

As for Silver, prices have stalled at the 21-day moving average, supported by the  50-day moving average having met a high of the 17.80 target. Bulls will need to overcome a triple-top target of 18.60/80 before a run to the  19.60s and September highs. On the flip-side, bears can target the 61.8% down at 16.10 aha of a run to the  200-day moving average down in the 15.80s.