UBS says gold is currently in no mans land

UBS comments on gold via eFX:

Gold continued its drift lower since Friday, albeit the reaction to softer headline employment data was limited overall, notes UBS.

"Price action shortly after the release of the data was particularly choppy, as market participants digested the relatively mixed information. Although the change in nonfarm payrolls was weaker than market expectations, examining the finer details revealed that the employment report, when taken in its entirety, was not as bad as the headlines may have initially suggested," UBS adds.

"In a sense, gold is currently in no-man's land and investors are understandably hesitant to put on sizeable positions ahead of the FOMC meeting next week. Position-squaring was evident last week, according to latest Comex data," UBS argues.

"UBS economists note that the 173k increase in jobs last month still represents a healthy enough level and supports the house view for the Fed to begin its rate hike cycle at the September 17 FOMC meeting," UBS projects.