Gold edged higher on Monday, rising after a solid U.S. jobs report issued late last week contributed to a drop in prices to their lowest level in about four months.
Gold for August delivery GCQ7, +0.31% tacked on $3.40, or 0.3%, to $1,213.10 an ounce. Prices on Friday settled at $1,209.70, the lowest finish since March 15, according to FactSet data.
The metal lost 1.1% on Friday to settle at $1,209.70—the lowest finish since March 15, according to FactSet data. 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, +0.07% rose 0.1% to 96.135 on Monday.
“The hawkish tone by central banks around the globe and sturdy U.S. [nonfarm payrolls] data released on Friday is going to provide enough catalyst for the gold traders to push the price below the mark of $1,200,” said Naeem Aslam, chief market analyst at Think Markets UK.
He said he sees support for gold at $1,177 if prices do fall below $1,200.
Looking ahead, it is “highly likely that we would test that support” and any economic data which exceed the economic forecast would keep the pressure on the gold price,” he said.
Meanwhile, data from the Commitments of Traders report show 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, according to analysts at Commerzbank.
“This puts net longs at their lowest levels since February 2016 and August 2015, respectively,” they said.
“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,” they added. “In the past, such extreme positioning by speculative financial investors has often sparked a pronounced countermovement in prices.”
For now, silver for September SIU7, +1.00% rose 20 cents, or 1.3%, to $15.625 an ounce. The metal on Friday had briefly tumbled almost 10% in a “flash crash,” likely due to a trading error.
October platinum PLV7, +0.01% traded down $2, or 0.2%, at $902.20 an ounce, while palladium for September PAU7, +0.58% rose $3.75, or 0.5%, to $836.10 an ounce.
September copper HGU7, +0.00% gave up less than a cent, or 0.3%, to $2.640 per pound.
Among exchange-traded funds, the SPDR Gold Trust GLD, +0.10% rose 0.1%, the iShares Silver Trust SLV, +0.20% traded up 0.6%, and the VanEck Vectors Gold Miners ETF GDX, +1.13% added 1.2%.