Gold is holding steady in modest positive territory after the U.S. government reported employment gains last month in line with expectations. February gold last traded at $1,177.70 an ounce, up 0.71% on the day. Bill Baruch, chief market strategist for Chicago-based iitrader.com, said that he is keeping an eye on $1,172 as this represents a key retracement level from last year’s lows to the 13-month high seen in July. A definitive break of this price could lead to a greater chance that the market retests last December’s lows.
With jobs now in the rear view mirror, gold is facing its next test: the Italian referendum. ‘[T]he Italian referendum vote takes place Sunday and this could put Italy’s relationship with the EU in jeopardy; we think this is a viable reason to allocate to Gold before today’s close,’ Baruch said. Italian citizens will vote on constitutional reform on Sunday in what is seen by many analysts as the most significant European political event of 2016, with some arguing that it will be bigger than Brexit.