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• Frustration is starting to build among gold investors, but analysts are encouraging them to keep the faith as the market still has potential to break through $1,400 an ounce eventually.

While the breakout may not be on the horizon in the short-term, many analysts think that it is only a matter of time and instead of giving up, many analysts see a drop back to the lower end of its current trading range.

• This week has been particularly vexing for investors as the yellow metal was unable to hold gains above $1,350 an ounce even after last week’s rally, which saw the best weekly gains in nearly two years. This week the gold market has given almost half of those gains. June gold futures settled the week at $1,327.3 an ounce, down almost 2% from the previous Friday.

• After hitting a three-week high, the silver market also ended up giving back all of its gains from the previous week. May silver futures last traded at $16.268 an ounce, also down nearly 2% from last week.

• Analysts continue to warn that gold investors need to be patient and pick their buying opportunities carefully. Phillip Streible, senior market analyst at RJOFutures, said that he expects gold prices to fall back to its 200-day moving average, which comes in at $1,304.60 an ounce.

“I think we are going to be stuck in a long-sideways pattern and now we will test the bottom end of the range,” he said. “I would be buying gold around $1,305 and would get out of the market if prices break below $1,300.”

• The yellow metal opened the week with a strong positive tone. It peaked on Wednesday at $1,356/oz but then revered sharply, changing the short-term outlook. From the top lost more than $30 in two days.

• Yesterday price bottomed at $1,321 the lowest since March 21. It moved modestly off lows and finished at $1,324 posting a weekly loss of1.70%. A stronger US dollar was the main driver of the move.

• The retreat from the key resistance area around $1,355/65 signals that price is not strong enough yet to break that area and the wide consolidation range. The last time gold traded above $1,370 was back in July, 2016, and on top of $1,376 March, 2014.

• The speed of the decline weakened the short-term technical outlook for gold. It even fell below the 20-day moving average ($1,329). On a wider perspective, it continues to move sideways, unable to break $1,360 while to the downside, $1,310/00 remains a key support.

• If the bearish tone persists, a test of the bottom of the range seems likely. A daily close significantly below $1,310 would expose $1,300increasing the odds of more losses.

• While markets will be waiting for Friday’s government employment report, there will be enough data released through the week to keep investors engaged.

• Major economic reports that will be released this week include manufacturing and service-sector sentiment data from the Institute for Supply Management. Markets will also get private sector employment data from private payrolls processor ADP.

Reference: Kitco, FX Street