Demand for gold at 2-year lows
Gold markets keep on falling for a second consecutive week on improved US economic expectations. This week bullion broke below the 200-week EMA at $1440 and is retesting the bottom of the 2011-13 bearish channel. On Thursday XAU/USD dropped to $1380. The sell-off for gold eased slightly after data from the US showed a surprise surge in jobless claims to a six-week high.
Analysts at Saxo Bank say the renewed gold downturn began after the dollar broke above 100 yen last week. “We’ve seen continued dollar strength since then. The near-term outlook is pointing to a stronger dollar even though we may find a floor sooner or later”. In their view, $1300 an ounce should be the critical level for gold, where XAU/USD may reverse to the upside. “At that stage, we will have corrected 50% from the whole rally that started in 2008.”
Chart. Weekly XAU/USD