Weak ADP report sends Gold to breakout above $1270 this morning with high of $1275 now - the close above $1270 will start the major short squeeze fireworks. We can expect more talks on Taper pause and this "must buy correction" in the general markets is getting uglier with every slide lower.
"Gold jumps today more than 2% and is up now $28 to $1265 level. The real fireworks will be started after Gold cuts through $1270. Few news appear to be behind the move: another set of rumours of relaxing Gold import policy in India, bad economic data from China with PMI below 50 and pumped rumours in the western press about coming default in one of the shadow banking system products. US markets are sharply down today on Jobless claims and dismal Existing Homes Sales.
But the real story is US Dollar which is almost in a free fall and is crossing 80.60 level to the downside. This time we have the normal correlation and falling US Dollar is sending Gold to confirm its break out from 2013 Double Bottom at $1180."