Gold’s slide is set to deepen this week to below $1,270 an ounce if Friday’s closely watched U.S. jobs report signals improving labor market growth, CNBC’s latest survey of traders and strategists has found.
“The biggest economy of the world is on a continuous path of recovery and this is a bearish signal for gold,” said Naeem Aslam, chief market analyst at Ava Trade. “We have consistently said that we need to break above the $1,400 mark for any serious bull speculation to develop.”
Almost two-thirds of respondents in a CNBC survey (65 percent or 15 out of 23) said the price of gold will decline this week. About 22 percent said prices will be unchanged while just three respondents, or 13 percent, forecast gains.
If this week’s U.S. key economic numbers for March are positive, they could fuel a dollar rally and boost stocks but undermine gold’s safe-haven appeal.
Importantly, the March figures should be largely free of the distortions caused by recent extreme winter weather, and will likely show resilience in the broader economy.
Upbeat data may encourage the Federal Reserve to exit its bond-buying program and raise interest rates sooner than expected.
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