Gold dips on profit taking

Gold is off slightly as dealers secure their profits from last week’s rally.

Gold is trading at $1244, down 0.2% after the softer-than-expected non-farm payrolls figure from the US on Friday sent the metal soaring above the $1250 mark. Traders were expecting an increase of nearly 200,000 new jobs to have been created in December when in fact only 74,000 were created. The Federal Reserve is reducing the size of its bond-buying scheme from $85 billion per month to $75 billion per month. Investors are viewing the weak jobs report as a sign there will not be any more tapering for the foreseeable future.

The announcement on Friday pushed the precious metal to a one-month high; since it is only off by $2 today it could suggest there is renewed confidence in the asset since it posted its first annual loss for over a decade in 2013.

A report from the Commodity Futures Trading Commission on Friday showed us that traders increased their net long positions on gold by 18%. A dip in the price of gold could offer buying opportunities.

Spot gold chart

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