By Deepak Rangan
Comex Gold December is trading up by $14.5 at $1726.3 as unemployment data from Germany, Europe's biggest economy, indicated rising joblessness. Less than expected US ADP non farm figures also might prove bullish for gold.
-Germany's unemployment rose in October to a seasonally adjusted 10,000 to a total of 2.94 million out-of-job citizens. This is the first time in almost 2 years that Germany has seen a rise in unemployment. This does not bode well for the economy since it is jobs that create income and spending and subsequently Lead to economic growth
-Data released earlier had shown that the manufacturing PMI in October had decline for the first time in 2 years.
This decline in manufacturing activity coupled with growing unemployment is a classic indication of economic slowdown.
With the debt crisis threatening the stability of the Euro zone, a German slowdown may well prove to be the last nail in the coffin.
-US ADP non farm employment (also known as private sector jobs) for October declined to 110,000 from a revised 116,000 in September.
Immediate technical outlook
-Gold had earlier fallen to around $1680, a strong support. The $1680 area had previously acted as a strong resistance, before prices finally broke through and spiked to $1750. As such, $1680 can be continued to be seen as a strong level-be it support or resistance. Immediate resistance is seen at $1775.
-$1680 area also conjuncted with the 100 day SMA which strengthened the possibility of a strong support. Gold prices are currently trading between the 50 day SMA and 100 day SMA.
Levels to watch for: $1680, $1725, $1775
