Amid the downturn in gold prices, a floor has emerged for the time being as geopolitical uncertainties, including North Korea’s latest sabre-rattling, prevented the market sentiment from turning entirely bearish. However, the growing tensions in Asia have thus far been unable to dislodge the more hawkish outlook for US monetary policy.
When considering the more hawkish backdrop and jawboning from Central Bank officials, the only remaining piece of data that could undo the high likelihood of rising rates is a weak nonfarm payroll figure on Friday. Typically, higher interest rates translate to US dollar strength, weighing on gold, especially US dollar-denominated prices. The next key level to watch out for on the downside is $1225 per troy ounce. If prices fail to remain high, expect a fresh bout of selling.
Gold Tumbles Below $1230
Daily Analysis - 07/03/2017