• Gold saw a modest bounce back on Monday, rising after a solid U.S. jobs report issued late last week contributed to a drop in prices to their lowest level in about four months.
• Gold for August delivery GCQ7, -0.14% tacked on $3.50, or 0.3%, to settle at $1,213.20 an ounce.
• The metal lost 1.1% on Friday to end the session at $1,209.70—the lowest finish since March 15, according to FactSet data. The closely watched nonfarm-payrolls report showed 222,000 jobs were added to the U.S. economy in June, easily beating expectations. That helped to cement views that the Federal Reserve is likely to tighten monetary policy again later in 2017. Higher interest rates can lift the appeal of holding dollars. That also means that a stronger dollar undercuts the benefit of investing in gold that is priced in the currency and doesn’t offer a yield.
• “The hawkish tone by central banks around the globe and sturdy U.S. [nonfarm payrolls] data released on Friday is going to provide enough catalyst for the gold traders to push the price below the mark of $1,200,” said Naeem Aslam, chief market analyst at Think Markets UK.
He said he sees support for gold at $1,177 if prices do fall below $1,200.
Looking ahead, it is “highly likely that we would test that support” and any economic data which exceed the economic forecast would “keep the pressure on the gold price,” he said.
• Meanwhile, data from the Commitments of Traders report show that speculative investors are continuing to dump precious metals, with net long positions in gold and silver dropping for a fourth straight week in the week to July 4, according to analysts at Commerzbank.
“This puts net longs at their lowest levels since February 2016 and August 2015, respectively,” they said.
“Short positions in silver are currently at a record high, while short and net short positions in platinum are also at an all-time high,” they added. “In the past, such extreme positioning by speculative financial investors has often sparked a pronounced countermovement in prices.”
• On Monday, silver for September SIU7, -0.15% rose 20.4 cents, or 1.3%, to end at $15.629 an ounce. The metal on Friday had briefly tumbled almost 10% in a “flash crash,” likely due to a trading error.
Reference: Market Watch
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