Bullish Breakout In Gold – is it Going for $1,460 Today?
Arslan Butt • 1 min read
What’s up, traders.
As expected, the market is exhibiting sharp volatility as Asian investors try to price in worse than expected NFP figures. On Monday, the greenback trades lower on the back of worse than expected labor market reports. July’s US employment report revealed 164K jobs generated in the month and unemployment is steady at 3.7%, just above a 50-year low.
In response, the yellow metal gold is on course for a weekly gain of about 1.3% on Friday and 0.71% of gain earlier today during the Asian session. Weaker dollar underpins gold prices, scaling it to trade around the two-week peak of 1,458.
GOLD is also taking benefit due to lower interest rates. Rate cuts by the Fed tend to boost the precious metal’s prices due to lower opportunity cost. Which means, earlier investors were keeping funds in the dollar, as it was yielding 2.50% interest rate, but now it’s yielding lesser, around 2.25%, thus most of the investors start investing in other high-profit yielding securities.
Considering the safe-haven nature of gold, investors are feeling safer to keep their funds in gold. Perhaps, that’s the reason why holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, surged by 0.5% to 827.82 tonnes last week.
Key Trading Level: 1439.94
On the technical side, gold has violated the double top resistance level of at 1,447 and now it’s closing candles outside this range. This means, gold has now entered the fresh trading range and we may see it heading towards 1,458/60 later today.
I will be looking to take buy positions above $1,448 to target $1,458 to $1,460.