Gold in U.S. dollar closed the trading session 0.5% lower today.
Reuters noted today that the gold price was down “as a rebound in stocks and the dollar arrested a four-day rise, with uncertainty over the timing of a looming U.S. rate hike limiting price moves ahead of key U.S. non-farm payrolls data on Friday.”
It added that “Traders remain wary of taking up fresh positions until they receive more clarity on when the Fed will press ahead with its first rate hike in nearly a decade.”
The interest rate hike is now on the table for 5 consecutive years. It is being (ab)used by every commentator as the reason to explain gold’s decline. However, no rate hike has taken place in 5 years, and we remain in uncharted waters, with the lowest interest rate levels seen in history.
As we noted earlier today, the price of gold is showing a bullish chart pattern. That does not necessarily mean that prices will start rising exponentially from here. It merely indicates that the bottoming process is underway, before a new (up)trend slowly but surely unfolds.
The key price level to watch for a breakout in gold: $1,350 /oz.