Gold drops but reverts to a near three-month high

Gold was falling on Monday morning in Asia but continued under a two-and-a-half-month high. A limited U.S. jobs report indicated that the U.S. Federal Reserve could pause its asset tapering timeline, supporting the yellow metal.

Gold futures fell 0.30% over $1,828.25 at 12:15 AM ET (4:15 AM GMT) following running $1,833.80, its highest level after Jun. 16, throughout the previous session.

Investors proceed to consider Friday’s newest U.S. jobs report, which revealed nonfarm payrolls were at 235,000 in August. With the secondary gains in seven months and the Fed performing labor market improvement a condition to start asset tapering, investors now anticipate a pause in the central bank beginning the process.

Meantime, the lay-off rate was 5.2%.

The report also urged the Dollar Index, which usually moves inversely to gold, to its weakest level after Aug. 4. The dollar trimmed up on Monday.

Meantime, the Reserve Bank of Australia and the European Central Bank will give down their individual policy choices on Tuesday and Thursday.

On the demand front, physical gold demand in Asian hubs significantly decreased as prices rebounded throughout the preceding week. Nevertheless, hopes are growing that a forthcoming festival season in India could increase demand.

U.S. Commodity Futures Trading Commission data revealed that examiners increased their net long positions in COMEX gold and silver in the week closed Aug. 31.

In other precious metals, silver was even at $24.69 by the ounce. Prices increased 3.4%, the largest one-day percentage after early May, throughout the prior session. Platinum dropped 0.6% while palladium bound up 0.2%.

Gold still looks unimpressive

A weaker U.S. dollar and reducing U.S. yields post-payrolls boosted gold prices on Friday. Gold ended the session 1.0% more high-priced at USD 1828.00 an ounce, decreasing it to USD 1826.00 in a sinking Asian session.

The rally on Friday was unimpressive, notwithstanding the headline figure. 

The Nonfarm Payrolls miss was a prime environment for gold to stage a strong rally as Fed tapering fears were cleared off the table. Alternatively, gold could achieve a modest rally that never approached the primary resistance zone, just over USD 1830.00 and USD 1834.00 an ounce.

Although a daily close over USD 1835.00 an ounce removes the technical picture for a move to USD 1900.00, gold seems to be running out of time to do so. The price action on Friday strengthens that gold’s upward momentum is fading.