The price of gold has since early March continued to suffer from the strength of the US dollar, currently boosted by monthly improvements in employment and other economic health indicators.
The closing price of gold last Friday was $1,797.25 per ounce.
The next day closed at $1,768.40 per ounce, almost $29 away from its current low.
A day later, the gold price saw a slight uptrend (indicated by a green candlestick), with a day-high price of $1,776.33 per ounce.
PP Link Securities business manager Long Samnang said key catalysts for a further downward push on gold included improved employment figures and other business conditions in the US.
Last Friday, the US Bureau of Labor Statistics reported average hourly earnings, non-farm payrolls and the unemployment rate were 0.6 per cent, 263,000 and 3.7 per cent, respectively, according to Forex Factory.
The first two statistics were better than forecast and the previous month’s revisions, while the jobless figure remained unchanged.
Regarding business conditions as indicated by the Institute for Supply Management (ISM), the ISM Services Purchasing Manager’s Index (PMI)
increased to 56.5, 2.1 points higher than last month, Forexfactory.com reported on Monday.
Market analyst expert Samnang said pre-data expectations had left gold bulls disappointed.
“Gold prices sank below key levels on Tuesday, with metal markets back under pressure as stronger-than-expected US data boosted the dollar and ramped up uncertainty over strength in the US economy and how the Federal Reserve will respond to it.
“This could push the Fed into raising rates for longer than expected, especially if inflation remains stubbornly above the central bank’s target range.
“While the Fed has flagged smaller rate hikes in the coming months, the central bank also warned that rates could peak at much higher-than-expected levels,” Investing.com’s Ambar Warrick reported this week.
Samnang suggests investors should therefore follow the market trend in finding opportunities to sell or buy with limit orders rather than expecting the market to dramatically go up after a long-term low.