The gold price rebounded slightly on Friday morning after falling to a fresh weekly low on increased investor caution ahead of the blockbuster US jobs report today.
Spot gold was last at $1,144.80/1,445.50 per ounce, up $4.80 on Thursday’s close. But it struck a low of $1,131.70 earlier after the dollar struck another fresh high against the euro at 1.2364, trading now at 1.2399.
“Gold is looking vulnerable heading into this week’s US employment report, having fallen through support at $1,155,” UBS’ Edel Tully said. “From a technical perspective, the charts look poor. A weekly close below this support level opens the way for further downside towards $1050. This is making investors very nervous right now.”
If the payroll data comes near the 300,000 mark, the upper end of the forecast, it could send gold into freefall selling – a strengthening dollar would push prices down further.
“Market participants are likely to read this as a strong print,” Tully added. “We would expect downward pressure on gold to resume in this case, as the dollar enjoys further gains.”
“The response of gold ETF holders to a further slide in gold prices would also be important in setting the tone in the market in the days and weeks ahead,” she said.
A figure at the lower end of the 140,000-300,000 range may provide some relief from the heavy downside pressure on gold.
“Given the weakness in the gold market right now and the magnitude of the recent price decline, the response could be asymmetric as recent shorts get caught off guard. The forcefulness of a potential short squeeze would depend on the amount of short positions that have been built up over the past week.” Tully added.
In data already published this morning, German industrial production undershot at 1.4 percent, while the country’s trade balance was around expectations at 18.5 billion. French industrial production at 0.0 percent was better than expected, as was the French trade balance at -80.5 billion euros.
The US is also scheduled to release its unemployment rate, average hourly earnings, and consumer credit data. As well, Fed chair Janet Yellen is set to speak.
In the other metals, silver looks susceptible to testing $15.00 after hitting a fresh four-year low at $15.06 – it was last eight cents higher at $15.41/15.46 per ounce.
“We remain in a ‘falling-knife’ situation – although silver looks increasingly oversold, it continues to weaken. At some stage there is likely to be a significant rebound but we will have to wait until the market shows its hand,” FastMarkets analyst William Adams said.
Toronto Dominion Bank has become the sixth participant of the London silver pricing benchmark, joining HSBC Bank USA, Mitsui & Co Precious Metals, the Bank of Nova Scotia-ScotiaMocatta, JP Morgan Chase and UBS AG.
Palladium has been rangebound – it was last $5 higher at $752.00/758.00 per ounce, while platinum was up $1 at $1,190/1,200.
(Editing by Mark Shaw)
The post Gold price rebounds from fresh weekly low, US jobs data eyed appeared first on The Bullion Desk.
No comments:
Post a Comment