By Barani Krishnan
Investing.com - Gold longs are unable to shake off their misery yet, with the yellow metal suffering its sixth setback in seven days after futures briefly broke below the key $1,700 support on Wednesday.
“I'm not sure I can name a more-hated financial asset right now than gold,” Adam Button said, commenting on ForexLive. “I think there's a case for nibbling in the $1670-$1700 range because the fundamental picture is sparkling. But at this point it's catching a falling knife.”
Joel Frank concurred as much in a blog posted on FXStreet. “The gold bears are back in control,” he wrote. ”Risks may be tilted to the downside heading into Friday’s official labour market report.”
Gold for April delivery on New York’s Comex settled down $17.80, or 1%, at $1,715.80 an ounce after touching a session low of $1,699.95.
Since Feb. 22, the benchmark gold futures has lost almost $93, or about 5%. In Tuesday’s trade, its only positive session in the past seven, it rose just around $10, or 0.6%. The Dollar Index also rose, adding to gold’s downward pressure.
Both bond yields and the dollar spiked after President Joe Biden raised the bar for Covid-19 vaccinations on Tuesday, saying he expected to get all adult Americans immunized from the virus by the end of May — two months ahead of his earlier target. A quicker recovery from the pandemic will push forth appetite for risk targets, weighing heavily on so-called safe havens such as gold.
Analysts said some longs in gold could hold out for hopes of an inflationary bounce from Covid-19 relief checks that the Biden administration will be sending out to Americans by mid-March, if the president’s $1.9 trillion stimulus plan for the pandemic gets passed by next week.
Gold might also get some reprieve if Federal Reserve Chairman Jerome Powell casts a less favorable outlook for the economy when he speaks at an online event hosted by The Wall Street Journal on Thursday.
But the big event for gold will still be Friday, when the Labor Department releases the U.S. jobs numbers for February. The market’s consensus is for a growth of 180,000 jobs last month, above January’s 49,000 expansion. A much higher growth could again weigh on the yellow metal.
“A strong number could see gold drop below the big figure and open the door to an extension of downside towards resistance in the $1660-70 region,” said Frank of FXStreet.