🚨Gold slumps 3% amid markets preparing for Chinese Lunar Year pause

Gold (GOLD) is down 3%, sliding to around $4,930 per ounce today. The broader decline across precious metals comes at a time when the latest US labor-market data proved much stronger than expected, while China—one of the key spot-demand markets - will remain closed from Friday, February 13 through the end of February 24 due to the Lunar New Year holiday.

After yesterday’s strong US payrolls (NFP) report, markets are pricing in lower odds of Fed easing this year. That has supported a rebound in the recently oversold US dollar, while precious metals have lost some momentum. Today’s relatively low jobless claims reading also reinforces the view that concerns about a near-term slowdown in the labor market may be overstated, and that last week’s JOLTS data and the Challenger report did not provide a complete picture.
From a technical perspective, gold is pulling back toward the 50-day EMA. If that average were to be tested for a third time, it would imply a move toward roughly $4,700–$4,740 per ounce, where a more meaningful support zone could be expected—also strengthened by recent price reactions in that area. A break below would raise the likelihood of a test of $4,350 per ounce.

Historically, gold has tended to perform better in the 10 days leading up to the Lunar New Year in China and has often continued to rise during the holiday period. This time, however, uncertainty around liquidity conditions during the closure and the risk of a sentiment reset once Chinese funds and retail investors return could add near-term pressure to the gold market.

Source: xStation5

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