 Hello, welcome to today's CMC Markets Commodity Snapshot with myself Jasper Lawler. Today we're going to be talking about gold. Now this should be particularly interesting because next week we have the US non-farm payrolls unemployment report and of late gold has been one of the biggest traders of this report. Now gold makes for interesting trading just because it trades as a store of value and a safe haven asset but it also trades just off its own supply-demand dynamic as well as the the technical factors like everything else so we're going to be having a look at some of those those today. Now a big theme in the markets at the moment is the ongoing tensions between Russia and Ukraine and what you may have noticed is that the price of gold will typically move higher on days when the tensions escalate so any chance of military intervention any imminent chance of war gold is flying higher as a safe haven asset so that's part of a larger theme that we've seen in gold since the start of this year where the prices is rallied from its lows around 1200 up to almost 1400 just the other day really on on those safe haven flows away from emerging market economies. Now while the emerging markets are going to be a continuing theme and something we have to keep looking at for the price of gold the other big theme for gold is the quantitative easing and the tapering of that program from the US Federal Reserve. Since they announced the tapering program the price of gold has has collapsed from close to $2,000 an ounce down to the aforementioned 1200 and so every time there's an improvement in US economic growth and it looks like the tapering is going forward whereby the central bank will be reducing how much money there they're flooding into the economy how many dollars they're flooding into the economy there's just less need for gold to hedge against that that devaluation of the US dollar so the closer we get to raising rates in the US the less need there is for gold if we see a backtrack from this tapering program whereby they pause of tapering or perhaps even start increasing the amount of money they're adding to the economy again then that will be very good for gold and that's anything from that from the from the central bank of the US or anything implying slower growth in the US generally at the moment that's that's positive for gold and that's that's the other big factor right now now there's also the physical supply and demand side of the equation the demand is quite strong the demand for the physical gold is strong particularly from central banks and particularly from the emerging market central banks namely China and recently we saw a large purchase from Iraq and more recently we saw a large purchase from Russia so there is physical demand and that's not just from central banks that's also from the people of China and also India particularly heading into wedding season that's that's an ongoing source of demand for the actual physical gold now on the supply side what a lot of people are referring to is the fact that it does cost miners a certain amount of money to get the the commodity out of the ground and what a lot of people have talked about is a thousand dollars per ounce if the price dips much below that then it may just not be worth the miners actually digging the gold out of the ground so and actually mining it so remain to be seen if that is the case but that could be a possible support to the price just that that underlying ability of the miners to to dig it out now have a look at the technical side of things let's bring up this daily chart for gold now as you can see the price action of late has been not too positive for the brushes metal here it's been somewhat of a collapse since the price got close to 1400 there are some some mixed bullish and bearish signs on this daily chart it looks fairly bearish but that may not be the full picture one thing you can see here is that the price is right next to the 200 day moving average on this daily chart that could be supportive the price has dipped just below it but the price just below there is also the 50% retracement of this up move that started at the beginning of the year and it's also the the round 1300 mark which is roughly where we are right now just a bit below so there's a bit of possible support to the price and if we flip over to this weekly chart for gold that we can see perhaps the picture is not so negative what we're looking at is potential longer-term double bottom at that 1200 number if we can stay above this 200 day SMA it's positive there is a price trend line down from those November 2012 highs and that's been pretty decisively broken and this weekly RSI is above 50 the the main negative thing that we're looking at this weekly chart though is this weekly bearish engulfing candlestick pattern and that typically points to some short-term bearish action but we have seen a bearish week this week so far and so that could be an end to the bearish action should this support that we're testing at the moment hold up if not then we could be looking at a full retracement down to the 1200 just suggesting that we're in a sort of 1200 to $400 range so that's the picture on gold have a look out for this non-farm payrolls unemployment report from the US next week that's going to be a big driver of the gold price and many markets going forward so good luck trading thanks again my name's Jasper Lawland this is CMC markets commodity snapshot