Gold futures headed lower on Monday, poised to post a loss after back-to-back session gains and following a rise above $2,500 an ounce last week to reach their highest level on record.
“It is possible that the price may see further retracement, and this is purely because the gold price went too far and too quick last week,” said Naeem Aslam, chief investment offer at Zaye Capital Markets, in market commentary. The price level of $2,500 is “very hot for many traders, and they are not going to feel very comfortable buying gold above this price point under the current circumstances.”
“Risk appetite” is back, with U.S. equity markets having experienced a decent rally last week, he said. Benchmark U.S. stock indexes were also trading higher Friday, drawing some interest away from gold.
Meanwhile, a large number of investors have also already “baked in the possibility of a deeper rate cut” by the Federal Reserve, said Aslam, but if Fed Chairman Jerome Powell does not indicate that possibility, there may be further selloffs for gold.
In Monday dealings, December gold was down $5.50, or 0.2%, at $2,532.30 an ounce on Comex after touching an intraday record high of $2,538.70 on Friday.
