• Gold has edged lower, retreating further from last week's 3-1/2-month high as the US dollar regained some ground against the buoyant euro and traders bet on further US interest rate hikes after Friday's payrolls data.
The dollar, which has remained weak after its biggest annual drop since 2003, had helped to lift assets priced in the US currency, with gold last week registering a fourth straight weekly gain for the first time since April.
• Spot gold was down 0.1 per cent at $US1,318.84 an ounce by 1.41 pm Monday EST (0541 Tuesday AEDT), while US gold futures for February delivery settled down $US1.90, or 0.1 per cent, at $US1,320.40 per ounce.
• Technically, February gold futures prices closed near mid-range. The bulls still have the overall near-term technical advantage, amid a four-week-old uptrend in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,280.00. First resistance is seen at last week’s high of $1,327.30 and then at $1,335.00. First support is seen at $1,312.70 and then at $1,307.10. Wyckoff's Market Rating: 6.0
• "Gold has been following the dollar pretty heavily. We are watching the dollar relative to US deficits," said Rob Haworth, senior investment strategist for US Bank Wealth Management. "Higher deficits, which it looks like tax cuts will do, means a weaker dollar. So there's room for gold."
• Market participants are awaiting US Consumer Price Index (CPI) data later this week, which are expected to show inflation likely increased 0.2 per cent in December after rising 0.1 per cent in November.
• "Investors think the Fed is stuck on a path of three rate hikes right now. Everyone's waiting to see what that inflation is," said Chris Gaffney, president of St. Louis-based EverBank's world markets division.
Longer term, sentiment for gold is bullish, Haworth said.
• Among other precious metals, silver was down 0.7 per cent at $US17.11 an ounce, having hit a 1-1/2-month high of $US17.29 on Friday.
Platinum was 0.2 per cent at $US971.40 an ounce after touching a more than 3-1/2-month peak at $US973.60 and palladium was 0.9 per cent higher at $US1,099.60, off last week's record high of $US1,105.70.
Reference: Business News, Kitco
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