Gold Prices Fall on Jobs Report
Source: The Street, Alix Steel (2/2/11)
"Safe-haven buyers clashed with investors dumping gold for riskier stocks."
Gold for April delivery was down $3.80 to $1,336.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price today has traded as high as $1,345.60 and as low as $1,331.10. The spot gold price was shedding $6.90, according to Kitco's gold index.
The U.S. dollar index was rising 0.15% to $77.14 while the euro slipped slightly at $1.38 versus the dollar.
Gold's fate seems to be range-bound in the short term as prices are unable to conquer their $1,380 resistance area but also able to hold the $1,308 support level.
Gold was lower in early trading as private sector hiring in January jumped 187,000, according to ADP reports, and investors were drawn into stocks after the S&P broke 1,300 for the first time since June 2008.
Gold prices curbed their selloff, however, as reports circulated that supporters of Egyptian President Mubarak were clashing with protesters in Cairo after Mubarak announced that he wouldn't seek reelection in September. Although the Egypt crisis is far from over, the lack of violence decreased the need for gold as a safe haven asset. The bump up in violence might be enough to boost gold.
"As the stock market continues to move up. . .[gold] will lose momentum," says Randall Warren, chief investment officer at Warren Financial Service, an advisory firm based in Philadelphia. "[There is] no kick to the upside."