• Gold held steady near two-week lows on Monday, with the dollar remaining supported by expectations of monetary tightening in the United States following stronger-than-expected jobs data last week.
• "The job data was very good; gold is pressured," said Richard Xu, a fund manager at China's biggest gold exchange-traded fund, HuaAn Gold.
• "There is not much other geopolitical uncertainty in the world, no extreme events. That's why risk-aversion is subsiding and gold prices aren't doing well."
• Gold is used as an alternative investment during times of political and financial uncertainty.
• Spot gold had risen 0.1 percent to $1,258.69 per ounce by 0347 GMT. On Friday, it touched its lowest in just under two weeks at $1,254 an ounce and registered its first weekly decline in four.
• U.S. gold futures for December delivery fell 0.02 percent to $1,264.30 per ounce.
• Asian stocks advanced on Monday, taking their cue from Wall Street, while the dollar moderated but retained most gains made on stronger-than-expected July jobs growth and the promise of a U.S. tax plan that will repatriate corporate profits.
• "Investors were quick to liquidate some long positions with market pricing of another rate hike by the Fed rising slightly as a consequence," said ANZ Research in a note.
"However, the losses were limited, suggesting investors are not completely convinced."
• Spot gold may retest support at $1,255 per ounce, a break below which could cause a further loss to the next support at $1,247, according to Reuters technical analyst Wang Tao.
• In other precious metals, silver was flat at $16.23 per ounce, having retouched Friday's over two-week low of $16.17 an ounce earlier in the session.
• Sean Lusk, director of commercial hedging with Walsh Trading, suggested gold prices will bounce after initial weakness in the aftermath of the U.S. jobs report.
“I think after this price break, you’ll see more buying come in,” he said, suggesting the U.S. dollar may remain soft. Gold could briefly fall to the mid to low$1,250s area, he continued, but then may remain underpinned by more “political chaos going forward.” So Lusk’s bottom line: “I wouldn’t want to be short here. I think we’re in an environment where dips will be bought.”
• Bill Baruch, senior market analyst at iiTrader.com, is also upbeat on gold. He said that while the employment data was good, it also was not enough to reverse the impact of a previous string of disappointing economic reports. Further, he said the jobs report wasn’t robust enough to increase expectations for more aggressive Federal Reserve monetary policy, and the absence of this will ultimately be positive for gold.
• Meanwhile, Kevin Grady, president of Phoenix Futures and Options LLC, looks for the metal to slide some more after the jobs data.
“It looks like those [jobs numbers] are positive for the economy,” Grady said. “Although it [the next expected U.S. interest-rate hike] is not going to be until December – it confirms that it will be in December. That is going to be a strong headwind for gold.”
The market has been helped lately by “strong buying” from speculators on pullbacks, he said, with physical demand in India and other key buying nations reportedly soft. Still, “I think there is going to be sellers of rallies. I’m looking for around $1,275 to be good resistance for us.”
• Heading into the new week, Bill Baruch said that he is watching the 50-day and 100-day moving average at $1,259.50 and $1,261.50 an ounce. He added that if these initial support levels hold then gold could easily head back to the mid-$1270 level next week.
However, with downside momentum picking up, most analysts are watching key support between $1.255 and $1.250 an ounce. If that level breaks then gold could easily fall to the 200-day moving average, which comes in at $1,230, according to some analyst....
Reference: Reuters,Kitco
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