Spot gold prices are trading narrowly lower Monday extending their declines for a third consecutive session. Sentiment in the precious metal remains on the fragile side, after Friday’s US non-farm payrolls report failed to ignite the flames of the quantitative easing (QE)
brigade that had previously been buying dips of gold amid hopes of a poor US jobs data number, which would in turn spur the Federal Reserve into taking some measures to stimulate the economy. Although Friday’s figure fell short of expectations, it still exceeded the May number and was perceived by some of the gold hawks as a modest improvement, in turn lowering the probability of hopes of a third round of QE from the Fed. The precious metal also shows no signs of recapturing its haven status as the USD, US Treasuries and German Bunds remain the top destinations of choice for the flight to safety. Hedge funds have also backed away from gold as volatility in the precious metal continues to decline. Support in gold is seen at $1564, whilst resistance is building above around the $1592/95 area, with prices currently trading $1582.20.
EasyForexNews Research Team