Gold prices slipped to their lowest in nearly a week on Monday as global stocks firmed on the back of upbeat economic data from the United States and a stronger dollar.
Spot gold was down about 0.5 per cent to $1,310.76 per ounce at 1120 GMT, having hit $1,326.30 (Dh4,870.54) on Thursday — its highest since April 26.
US gold futures fell 0.5 per cent to $1,315 per ounce.
“It is just a reaction to the strong jobs report on Friday in the US and stock market recovery due to the dovish US.
Federal Reserve. These factors have reduced the short-term demand for gold,” said Saxo Bank analyst Ole Hansen.
“However, the longer term bulls will not be concerned as long as we stay above $1,275.” World stocks remained near two-month highs and strong US
jobs data propped up the greenback, denting appeal for gold.
However, European stocks struggled as the boost from the US data started to fade.
A closely watched report from the US. Labor Department showed on Friday that nonfarm payrolls jumped by 304,000 jobs last month, the largest gain since February 2018.
Meanwhile, the US central bank said last week it would be “patient” on future rate hikes.
Despite signs of a robust economy, the Fed is widely expected to keep rates steady this year, thanks to heightened worries over global growth, especially in China and Europe.
On the technical front, gold faces stiff resistance around the $1,325 level, ActivTrades chief analyst Carlo Alberto De Casa wrote in a note.
“There are high chances of seeing bullion caged in a lateral range between $1,300 and $1,325 this week.” Reflecting investor sentiment, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.8 per cent to 817.40 tonnes on Friday.
The overall outlook for gold, however, remains positive, analysts said.
“In the short-term we see little in the way to halt gold’s push for $1,350 per ounce, except a sudden positive development in US-China trade talks or a prolonged series of positive macroeconomic data,” OCBC said in a note.
Among other precious metals, palladium eased 0.4 per cent to $1,345.50 per ounce.
Silver fell about 1 per cent to $15.75 per ounce and platinum also dipped 1 per cent to $813.50.