Gold held steady near two-week lows on Monday, with the dollar remaining supported by expectations of monetary tightening in the United States following stronger-than-expected jobs data last week. "The job data was very good; gold is pressured," said Richard Xu, a fund manager at China's biggest gold exchange-traded fund, HuaAn Gold.
"There is not much other geopolitical uncertainty in the world, no extreme events. That's why risk-aversion is subsiding and gold prices aren't doing well." Gold is used as an alternative investment during times of political and financial uncertainty. Spot gold was nearly flat at $1,257.51 per ounce at 0706 GMT. On Friday, it touched its lowest in just under two weeks at $1,254 an ounce and registered its first weekly decline in four.
US gold futures for December delivery fell 0.1 percent to $1,263.10 per ounce. "Investors were quick to liquidate some long positions with market pricing of another rate hike by the Fed rising slightly as a consequence," said ANZ Research in a note. "However, the losses were limited, suggesting investors are not completely convinced."
Spot gold may retest support at $1,255 per ounce, a break below which could cause a further loss to the next support at $1,247, according to Reuters technical analyst Wang Tao. "We think gold is going to trade in a very tight range because of the low level of liquidity in the market due to the holidays (in Asia)," said Xu.
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