Gold slips back as further improvement in shown in the US economy. Jobless claims for the week ended September 7th dropped to 292,000 compared to the predicted 330,000. Furthermore the percentage of small businesses looking to hire has rallied to its highest level since before the financial crisis.
This positive happening in the labour market has lead to gold being susceptible to increased volatilities of the likely results in the upcoming fed FOMC meeting next week.
It certainly seems since the geopolitical risk in Syria has calmed down which has lead to an increased focus for gold on the FOMC meeting.
Goldman Sachs have gone as far as predict gold could plummet to below $1,000 as the fed rein back then cease stimulus coupled with the continued improving economic picture. This opinion to an extent is followed by other large institutions such as UBS and citi group.
However Merrill Lynch has stated that gold is likely to rise in face even if the fed does embark on tapering, but only if it is less than expected. Further although investor demand may have waned again recently physical sales of bars and coins remain strong especially in China. This shows that that there remains a bullish sentiment for the yellow metal which is likely to continue well into 2014 as China is set to overtake India as No.1 gold buyer.
Furthermore, the lustrous metal platinum is likely to perform much better under stricter monetary policies, and could reach $1,850 per ounce in 2014.
What to look out for
The main catalyst for the future gold price will be the policy results after the FOMC meeting. US economic data to watch out for will be the August industrial production on 16 September and the U.S. August inflation data on 17 September. It is also keeping an eye on any new political risks from Syria.