Gold futures moved up on Monday, looking to extend their gains after posting the first weekly price gain in four weeks as traders look to the U.S. dollar for hints on the dollar-denominated precious metal’s next move.
Gold has traded in “near perfect inverse correlation” to the ICE U.S. Dollar Index
DXY,
The dollar index saw steady trading in Monday dealings, after ending the week lower.
This coming Friday’s monthly U.S. jobs report is “probably the most consequential economic report of the week,” he said. “There is a good chance that we will see a strong June jobs report and that could lend strength to the dollar on expectations of tighter U.S. monetary policy in the future.”
If we see gold rally back above $1,800 this week ahead of Friday’s jobs numbers, that might be a good place for gold bulls to exit some long positions,” he said.
August gold
GC00,
“Gold is still finding it impossible to overcome the 100-day moving average and the $1,800 per troy ounce mark just above it,” wrote analysts at Commerzbank, in a Monday note. “Another attempt failed on Friday, whereupon the gold price fell again, even dropping overnight to a weekly low of $1,770.”
The 100-day moving average stands at $1,792.17 an ounce on Monday, according to FactSet.
Commerzbank noted that commitments-of-traders data released by the Commodity Futures Trading Commission on Friday showed speculative investors slashed net long positions by around a third in the week ended June 22, while net speculative silver longs also fell sharply and net speculative longs in platinum were almost entirely eliminated.
That helps explain why platinum underperformed gold until the beginning of last week, they said, noting that since then, gold has failed to recover from its setback while platinum has climbed by $80 from its low.
July platinum
PL00,
The most-active September copper contract
HGU21,