No need to build that Ark just yet!

Gold prices tested the October highs at $1,244 but pulled back slightly to its current level of $1237. Silver too touched $14.51 and currently stands at $14.47.

Today has been somewhat of a roller coaster ride both for the dollar and gold and silver prices.

Some of the factors weighing against gold and in favour of the dollar are:

• The US reported that the November ISM non-manufacturing index rose to 60.7 against expectations that the index would dip to 59.7. This helped buoy the dollar and depress gold.
• Stock Markets falling because of lack of confidence in the alleged China US deal – which we said all along was just a delaying tactic so that back room negotiations could take place – and monies moving into the US dollar as a consequence.

Despite these there were also factors in favour of the dollar weakening including:

• Yield curve differentials which we mentioned in our video on Tuesday
• Dollar index falling currently to 96.80 because of concerns over the economy and ahead of important economic data coming out tomorrow and especially the non- farm payroll report
• This one will surprise you and is little mentioned in this context and that is the detainment of Meng Wanzhou at Vancouver airport on Saturday on an extradition request from the US.

China has demanded her release, and called the arrest a human rights violation.

The charges remain unknown but the US has been probing Huawei over possible violation of Iran sanctions. She faces a bail hearing on Friday. This could indeed spark a serious international incident between the 2 superpowers of China and the US and this should be considered, though we suspect the US will eventually back down and release her – even if its on bail.

On the weekend we shall give our normal update but needless to say we wish to add that there are forces operating in each direction with what appears to be of similar if not equal strength. Whilst we fully accept that gold could touch $1300 and silver $15 in the near future, we actually doubt that it will and if it does it will be short lived – our view to those who are listening – we are not at the end of days yet and you can probably put off that Ark building for this weekend – though we have to admit its darned wet here in the UK.