Gold has been falling for most of the day, but it’s taken a sharp turn lower this afternoon and is now trading down 1.4% at $US1263 an ounce.
The metal has closed lower in eight of the last nine trading sessions.
“We remain cautious on the outlook for gold, as the metal faces two strong headwinds,” says Michael Lewis, head of commodities research at Deutsche Bank. “The 1-month GOFO rate has moved into positive territory, suggesting an easing of physical tightness while the stronger-than-expected non-farm payroll data has strengthened the case for the Fed to begin QE tapering before year end, which we view as U.S. dollar bullish.”
The chart below shows the drop.