Gold bullion prices drifted down to $1.642 per ounce during Tuesday morning's London trading – though still slightly up on last week's close following gains in Asia – while stocks fell and commodities were flat as markets digested last Friday's disappointing US jobs data.
"Major support [for gold] comes from the long-term uptrend, which is still intact, currently around $1600," says the latest technical analysis note from bullion bank Scotia Mocatta.
Silver bullion meantime dipped to $31.49 per ounce before recovering some ground by Tuesday lunchtime in London, remaining broadly in line with where it began the week.
Asian traders reported increased physical gold bullion demand Tuesday, following the end of the three week strike by gold dealers in India, the world's largest source of private gold demand. Indian gold dealers are now turning their attention to this month's Akshaya Tritiya festival as well as the wedding season.
"There were good retail sales yesterday," Harshad Ajmera, proprietor of JJ Gold House, told newswire Reuters this morning.
Over in Vietnam meantime, reports reaching BullionVault over the weekend suggest that many jewelry shop owners will close their business when a new government decree comes into force next month, since they fail to meet specified criteria to operate in the industry.
European stock markets traded lower Tuesday morning, with both the FTSE in London and Germany's DAX down 1% by lunchtime. The losses come after US markets sold off on Monday, following the publication on Friday of worse-than-expected US jobs data.
Nonfarm payroll data published by the US Bureau of Labor Statistics Friday show that the US economy added 120,000 nonagricultural private sector jobs in March – compared to analysts' consensus estimates of over 200,000 – prompting speculation that the Federal Reserve might consider another round of quantitative easing.
Despite this speculation, gold prices remain below where they started last Tuesday, before the publication of Federal Open Market Committee minutes that appeared to suggest Fed policymakers have become less inclined towards additional QE.
"It looks like we need bigger and better news to support gold right now," says Ole Hansen, senior commodity manager at Saxo Bank.
"Traders have been wrong-footed on numerous occasions during the last two months on QE on/off talks...The non-farm payrolls and India ending the strike should have triggered a stronger bounce, but at this moment... traders want to see the cash before jumping back into gold in a major way."