Thursday, May 3, 2012

Gold Price is Still Under Pressure

Gold prices fell on Wednesday as the decline in the stock market and other commodities, following a disappointing employment data of U.S. private sector and weak physical demand, adding to the decline in gold for the second day. Gold, which this year follows the performance of risky assets, is under pressure after ADP report showed the addition of workers of at least in seven months in April, adding to worries that the economy has lost its momentum.

Market players said the ADP data, does not seem strong enough to alter the view that good U.S. economic data recently has eroded expectations of additional quantitative easing by the Federal Reserve. The gold market is awaiting the data of April nonfarm payrolls on Friday for clues about whether the U.S. central bank will keep interest rates near zero for several years and use the stimulus to boost economic growth. News on Friday will have a big impact on gold prices. Unless payrolls data on Friday is bad, it's not going to drive up prices based on expectations of QE.

Precious metals traded down with the movement of gold prices continued to show weakness in early trading in Asian session. Release of U.S. jobs data that misses the prediction failed encourage investor interest in gold. It is also due to comments from members of the central bank indicating that the new stimulus measures will not be done in the near future.

The price of gold at $ 1,652.10 / ounce, drop $ 1.60 from its closing level in New York, silver at $ 30.60/ ounce, down 5 cents, platinum at $ 1,558.50 / ounce, drop 50 cents and palladium at $ 664.80/ ounce, down 20 cents.

In terms of technical, gold resistance level in the range of 100-day MA at $ 1.670 / ounce.

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