Vang SJC

U.S non-farm payrolls last Friday (March 6) sending the gold down $31 (2.6%) from its open price ($1,197.76/oz), the lowest since November 15th 2014.

From the chart, 3 candle sticks of 29/1, 6/2 and 6/3 had the same rate of declining.

Gold is still on pressure from positive NFP data last Friday

Gold is still on pressure from positive NFP data last Friday

On January 29th, in its own minutes, Fed repeated that they will use the word “patient”to increase its key interest rate, instead of “in a considerable time”, spurring expectation of a rate hike in June. The number of jobless claims fell to 265,000 the week ended January 25th. Gold immediately “free fell”2.1% ($26) from its open ($1,283.40/oz).

Another better-than-expected Non-farm payrolls on February 6th (with 257,000 new jobs and unemployment rate down to 5.5%) also sent gold price to decline by $33 (2.6%) from its open ($1,265.77/oz).

On March 6th, gold ended at $1,166.70/oz. At this point, price reached a support of $1,167.32/oz (on January 2nd 2015). There seemed a sign of breaking, yet price ended near the support.

Since January 23rd 2015, market is still on downward trend and has showed no sign of stopping. Price reached the support and closed around this level due to weak selling momentum at the end of U.S session on Friday, and investors cut their previous selling positions.

Early 2015 March 9th, gold price posted its declining trend before showing sign of rebouncing (increased 0.5% from its open of $1,169.63). Gold ended yesterday session with a 0.2% decrease, at $1167.04, because of weak market force on the first trading day. Gold is still on pressure from positive NFP data last Friday.

On the same day, Apple introduced its new iWatch. Each new gold-version of iWatch may use up to 2 ounces of gold. If 10 million products are sold each year, it means Apple may need 700 metric tons of gold. Gold explotation all over the world is currently 2,500 metric tons/year. Apple likely becomes the third biggest gold comsumer, after India and China. Gold seems to receive positive support in the near future. However, there has not any sign of market reacting to this news.

Gold price on Tuesday rallied slightly (gained 0.2% from its open of $1,169.00), before bouncing back. Price is near a new support of 1,141.61 of December 1st 2014. There is great possibility that price will retreat after touching this hard sentiment support level. The gap between today’s low and that support is 17$.

Looking at the chart, MA200 line is currently quite far from the recent lowest ($90). Gold is expected to rebounce to $1,190, after reaching that support.

However, there’s still a chance that price will break the $1,141.61 support. The U.S’s economy is healthy with optimistic Non-farm payrolls in Feb, raising the possibility of a rate hike, pushing even more downward pressure on gold. Meanwhile, ECB had begun its QE, sending the Euro slide to its near-11-year low. Australia and New Zealand Banking Group (ANZ) suddenly lowered its forecast for gold, to $1,100 in the second quarter. Gold price may show little change until the next Fed’s meeting this 18th.

Linh Nhan