Gold prices were marching lower ahead of a key employment report that is expected to set the tone for the battered precious metal.
The Friday jobs report could prove a critical tipping point for the yellow metal, which could send the commodity lurching into bear-market territory, according to some gold watchers. A bear market for gold would see the metal register a decline of 20% or more since its 2015 settlement high of $1,300.70 an ounce on Jan. 22.
According to blogger and investment strategist Peter Grandich, the nonfarm-payrolls report could spark a $100 move in the gold price.
“A break below the pennant and it’s a near certainty [in my humble opinion] we see a test of the critical $1,000 area. Given how incredibly bearish and overcrowded the bearish camp is at the moment, I think such a test would fail and a break below $1,000 would follow, Grandich wrote in his blog Thursday.
In a recent note, analysts at research firm Aranca say that gold futures may have lost their sheen temporarily pointing to a number of headwinds, including a stronger dollar, reduced fears about Greece, the signing of the Iran nuclear pact, and slack demand for gold due to a slumping China.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.