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.