The better-than-expected U.S. unemployment number on Friday lifted markets' spirits and opened the door to the possibility that the Federal Reserve could raise interest rates sooner than expected. This would lend support to the U.S. dollar but put pressure on gold prices.
The precious metal shed 4% on Friday and continued its downtrend on Monday. "Support in the yellow metal is now thought to be found near $1130/1135 but the target being aimed for could also possibly lie deeper - near $1072 per ounce" says Jon Nader, senior analyst at Kitco.com in his daily metals report. Now the question remains is this correction in gold prices a buying opportunity or the start of a bearish trend?
Gold delivery for February was plummeting $26.20 to $1,143.30 at the Comex division of the New York Mercantile Exchange. Gold prices have traded as high as $1,162.50 and as low as $1,136.10. The U.S. dollar index was rising .03% to $75.94. Silver prices were shedding 48 cents to $18.03 while copper was lower by 6 cents to $3.17. Mining stocks, a more leveraged way to invest in gold, were selling-off along with the commodity. Barrick Gold (ABX - Get Report) was lower by 3.35% to $41.43. The stock received several downgrades on the news that production at its Cortez-Hills mine could be halted due to environmental concerns. According to Barrick's website "the company is currently evaluating the decision and considering its legal options." Competitor, Newmont Mining (NEM)was losing 1% to $51.18.