Gold floated near the $1,200 mark last week following two days of losses as the dollar held its position near the highest in 11 years against a basket or against trading partners ahead of key U.S. economic data.
Comex gold for the delivery this coming April was down 0.06 % at $1,203.7 per troy ounce which shifted its daily range of $1,208.4-$1,202.7 respectively. The precious metal plunged 0.3 % last week to $1,204.4 which extended last week’s losses of 0.4 %.
Gold still remained under tight pressure as U.S. data this week will most probably show a robust pace of economic recovery which augmented the chances that the Fed will jumpstart an interest hike sooner instead on a much later date.
The Automatic Data Processing Inc. will potentially report that U.S. private non-farm employers were able to add 220,000 new jobs in February which would be the 9th straight month job growth above 200,000. ADP’s report is considered a precursor to the labour Department’s jobs report which will come out next week.
Due later this week is the Institute for Supply Management’s February report on services sector activity and is anticipated to show strong growth while Markit Economics releases its own gauge, along with composite data.
The U.S. dollar was able to trade near the highest level in more than a decade against six major trading peers which resulted to a weaker euro that cascaded after wore-than-expected business activity data from the Eurozone last week.
The U.S. dollar index for settlement last March traded 0.31 % higher at 95.705 which shifted in a daily range of 95.755-95.365, close to January’s 11-year high of 95.850. The U.S. currency gauge went down 0.7 % last week to 95.408.
Investors will be keeping a closer inspection on the euro ahead of the coming week’s decision by the ECB and the implementation of the central bank’s government bond buying programme which will begin this month.
In the interim, the mood is still bearish though the trade in the tight range will issue data not until the jobs data will be released this week. Exchange-traded funds are seeing some big outflows which could also add to the pressure if the U.S. data is better than expected.
Assets in the SPDR Gold Trust, the largest bullion-supported ETF fell, fell by 7.76 tons to 763.49 tons last week after remaining still for six days which declined by another 2.69 tons to 760.8 last considering that the drop was the largest this year.
Pivotal points to consider
Based on the Binary Tribune’s everyday analysis, April gold’s central pivot point on the Comex stands at $1,204.5. Should the contract break its first resistance level at $1,214.3, the next barrier will stand at $1,224.3. In the case of another broken key resistance, the precious metal may attempt to advance to $1,234.1.
If the contract further manages to breach the S1 level at $1,194.5, it will be able to see support at $1,184.7. Furthermore, with this second key support broken, the possible downside is that it may even further extend to $1,174.7.