Risk-on was back in U.S. equities after the Dow Jones Industrial Average fell over 200 points on Wednesday due to trade spat fears. In the meantime, gold prices dipped modestly as the the Labor Department reported that jobless claims rose by 3,000 to a seasonally adjusted 215,000 in the week to Saturday, which fell in line with expectations.
The four-week moving average for new jobless claims fell by 3,750 claims to 216,750. After the last week’s volatility-laden performances in the major indexes, it might seem that investors would want to hide away into safe haven assets like gold.
One thing is certain–the Swizz appetite for gold remains strong.
“Gold is among Swiss people’s favorite forms of investment. The most popular one is real estate (mentioned by 53% of the interviewees), but gold comes a close second with 48%, followed by shares (30%), funds (25%) and current and savings accounts (24%). Platinum occupies ninth place, silver is in 13th place,” said the research team behind the survey, which was conducted by the University of St Gallen in cooperation with the precious metals trader philoro.
Nonetheless, prices for gold are on the brink of fragility, according to some analysts. In particular, the precious metal is having the hardest time trying to break through the $1,300 price ceiling.
“Gold inability to break above $1,300 is an indication that the market is really fragile and I think investors should expect to see lower prices in the near-term,” said Fawad Razaqzada, technical analyst at City Index. “I think you have to continue to play gold to the downside as long as prices are unable to hold sustainable gains above $1,300. On the weekly chart I don’t see any reason to be bullish on gold anytime soon.”
Furthermore, Razaqzada is eyeing gold’s recent low of $1,266