Gold price slips, heads toward fresh four-month low
London (July 10) Gold prices continued to move lower on Monday, setting them on track for a fresh four-month low after a solid U.S. jobs report last week backed expectations for higher U.S. interest rates later in the year.
Gold for August delivery GCQ7, +0.19% dropped $2.40, or 0.2%, to $1,207.30 an ounce, on a path for a second straight day of losses.
“Gold came under considerable pressure as a result of better-than-expected U.S. labor market data on Friday and has fallen further to a four-month low ...as the new week of trading begins,” analysts at Commerzbank said in a note.
The metal lost 1.1% on Friday after the closely watched nonfarm payrolls report showed 222,000 jobs were added to the U.S. economy in June, easily beating expectations. That helped cement views that the Federal Reserve is likely to tighten monetary policy again later in 2017. Higher interest rates lift the appeal of holding dollars. That also means that a stronger dollar undercuts the benefit of holding nonyielding gold that is priced in the currency.
The ICE Dollar Index DXY, +0.15% rose 0.1% to 96.135 on Monday.
Commerzbank also noted that speculative investors are continuing to dump precious metals, with net long positions in gold and silver dropping for a fourth straight week in the week to July 4.
“This puts net longs at their lowest levels since February 2016 and August 2015, respectively. Short positions in silver are currently at a record high, while short and net short positions in platinum are also at an all-time high. In the past, such extreme positioning by speculative financial investors has often sparked a pronounced countermovement in prices,” they added.
Silver for September SIU7, -0.68% slid 1.2% to $15.25 an ounce on Monday, adding to a 3.5% loss on Friday. The metal on Friday had briefly tumbled almost 10% in a “flash crash,” likely due to a trading error.
October platinum PLV7, -0.04% traded down 0.2% on Monday at $902 an ounce, while palladium for September PAU7, +0.03% rose 0.1% to $831.80 an ounce.
September copper HGU7, -0.23% gave up 0.2% to $2.64 per pound.
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