Feb 8 Spot gold slipped on Monday from near a three-month top hit the session before, after a solid U.S. jobs report strengthened the dollar and potentially boosted the chance of rate hikes this year.
* Spot gold had slipped by 0.7 percent to $1,165.10 an ounce by 0008 GMT, as it fell back from its highest since Oct. 28 at $1,174.50 hit in the previous session.
* U.S. gold climbed 0.7 percent to $1,165.80.
* Across other metals, platinum shed 0.2 percent to $904.24, while palladium held0.4-percent gains at $501.30 an ounce.
Most Asian regional markets were closed on Monday for Lunar New Year, including Singapore, China, Hong Kong and Taiwan.
Hedge funds and money managers boosted their bullish bet in COMEX gold to a three-month high in the week to Feb. 2, U.S. Commodity Futures Trading Commission data showed on Friday.
SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.70 percent to 698.46 tonnes on Friday from 693.62 tonnes on Thursday.
- Gold finishes best week since July 2013 at the highs and gold up 5% this week.
Gold has been a sensational trade so far in 2016 and it continued to climb on Friday, gaining $18 to $1173.
The 4.9% rally this week is the largest since July 2013 and gold is now within striking distance of the October highs.
- It appears that not even profit taking can keep gold down for very long, as prices ended the session and the week on a positive note. Looking to next week all eyes will be on the U.S. dollar and Fed Chair Janet Yellen to determine where interest rates are going, which is potentially bullish for gold.
Chris Beauchamp, senior market strategist at IG Markets, said he is bullish on gold as it has made an important technical breakthrough and could have further upside in the near-term.
However, while most analysts are bullish in the near-term, they still see the potential for a correction at some point in the next couple of weeks. They note that some profit taking will be inevitable as the gold market has seen positive weekly closes four out of the last five weeks, trading near a three-month high.
Sean Lusk, director of commercial hedge at Walsh Trading, said that they could see prices push to $1,175 in the near-term but added that he recommends selling at that level.
Ole Hansen, head of commodity strategy at Saxo Bank said that gold has benefited as a result of unrealistic market expectations of zero rate hikes for the year. He added that while it is also unrealistic to expect four hikes, as the Fed forecasted in December, the market might start pricing in at least two.
However, Ole added that investors shouldn’t expect to see a sharp selloff in gold as global economic uncertainty will continue to be supportive. He said that gold could fall all the way to $1,100 an ounce in the short –term and still maintain its current uptrend.
Mike Dragosits, senior commodity strategist at TD Securities sees a slightly narrow range, saying that gold has to hold the 200-day moving average to maintain its current up trend. “A break below that level would give short sellers some more momentum and confidence to push prices lower,” he said.
But there is still potential for prices to push the bank’s target of $1,180 on new rate hike expectations and weaker U.S. economic data, he added.
Although the idea of the Fed raising rates four times this year seems unlikely, Dragosits also agrees that the market is too aggressive on expecting zero rate hikes. He pointed out that the domestic economy is still relatively healthy and an important economic driver. “At this stage in the game it is difficult to tell where we are heading and the Fed is going to need a little bit more time to figure what they are going to do,” he said.
Reference: Reuters, Kitco, FXlive
Thai
Eng