Gold Prices to Drop Further Next Week on Dollar Strength
London (Oct 4) Gold prices are set to drop further next week as the prospect of a stronger US dollar, buoyed by a recovering US economy, is expected to weigh on the precious metal's safe-haven status.
As many as 16 of 26 analysts polled in a Kitco Gold Survey said they expected gold prices to trade lower next week, while seven predicted that prices will rise and three forecast prices to trade sideways.
Frank Lesh, senior broker and futures market analyst at Futurepath Trading, told Kitco: "New highs for the dollar, new lows for gold. Is there any factor more important? We all know the reasons why and they aren't going to change soon. A correction will come as the dollar is overbought and gold oversold, but sometimes these conditions persist longer then we expect. I expect a lower gold market next week."
Adam Klopfenstein, market strategist with Archer Financial Services, said: "There is no reason to bargain hunt. Right now I'd rather own mold than gold. At least mold will reproduce."
Gold Ends Lower
US gold futures finished $22.20 lower at $1,192.90 an ounce on 3 October.
Prices are down 1.9% for the week as a whole.
The greenback struck fresh two-year and four-year highs against the euro and a basket of currencies on 3 October, in the wake of a strong US jobs report.
The world's leading economy added 248,000 jobs in September, beating expectations.
The American unemployment rate dropped to 5.9% in September, from 6.1% in August, falling below 6% for the first time since the recession.