Gold Slump Resists USD/JPY Decline

The pace of weakening gold prices was hampered after USD/JPY suddenly fell. Markets speculate Japanese intervention is behind this.

Gold prices fell slightly in the trading session Tuesday (03/October) evening. Spot gold fell 0.3% to $1822.42 per ounce and gold futures fell 0.4% to $1840.00 per ounce. The following XAU/USD chart also shows a 0.21% decline in gold prices to $1824.14.

In general, gold prices are still at a seven-month low. The US dollar is still supported by US economic data which remains solid, one of which is Job Openings data for August which tonight was reported to have increased by 9.61 million.

"The JOLTS report surprised the market because it raised the prospect of another interest rate hike while reducing expectations of a slowdown in the US economy. This had the effect of putting pressure on precious metals," said Edward Moya, senior market analyst at OANDA.

USD/JPY Suddenly Slumps

However, today's decline in gold prices was halted by the sharp weakening of the US Dollar against the Yen. USD/JPY suddenly fell after rising to level 105 after the release of JOLTS data. However, in general, the dollar rally still dominates. The market also speculates that Japan is carrying out currency intervention to prevent the Yen exchange rate from falling further.

This is based on comments from Japanese Finance Minister Shunichi Suzuki. He said that authorities were monitoring the currency market. However, any decisions regarding currency market intervention will be based on volatility, not on specific Yen levels.

According to Edward Moya's analysis, the US Dollar may weaken in the short term if Japan really intervenes. This means that the price of gold has the potential to find a support level and stop its decline.

However, Julius Baer analyst Carsten Menke estimates that gold prices could reach a low level of $1725 per ounce in the next 12 months if US economic data continues to improve.

For this week, the market will focus on US NFP data which is expected to increase by 169,000, higher than the previous month's figure of 187,000.