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Gold is getting smoked

Akin Oyedele   

Gold is getting smoked

Gold is getting smoked.

Near 8:20 a.m. ET, gold had fallen by more than $2 to $1,164.30 an ounce.

It is heading lower after tanking nearly 3% on Friday to a three-month low. The February jobs report released last week showed the US economy added more than 200,000 jobs for a 12th straight month, and the unemployment rate fell to 5.5% - a seven-year low.

In a note Monday, Barclays' Suki Cooper wrote that the strong jobs report increased bets that the Federal Reserve will raise interest rates as soon as June.

"While a rising rates environment bodes ill for gold, its sensitivity to Friday's data highlights that, the gold market at least, has not fully priced in a rate hike with the focus at the start of the year centered on Europe," she wrote.

And Barclays is forecasting that prices may head even lower:

"We believe the risks to gold remain to the downside, and the US macroeconomic environment is a major headwind to gold, until physical buying cushions prices, which is likely in April amid festival-related buying," she continued.

Here's a chart showing the plunge from last Friday:

Screen Shot 2015 03 10 at 7.42.02 AM

Finviz

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