Is Gold Breaking the the 50 Daily SMA After the Strong Bounce?

Gold bounced off the 00 daily SMA last week, but buyers are facing the 50 daily SMA now where the buying stopped on Friday

Skerdian Meta•Monday, March 13, 2023•1 min read

Gold found support at the 100 daily SMA last week

Gold turned bearish in February as the data showed a decent bounce in the US economy in the first two months of this year, increasing odds for a 50 bps hike from the FED. But now markets are not so certain, as the data last week came in mixed, while other factors are also helping push the price of Gold higher.

On Friday, the price of GOLD started to increase after figures showed that the number of Americans who applied for unemployment benefits increased the most in the last five months during February. The non-farm payrolls were strong as well, but they weighed further on the USD and increased the uncertainty, which helped Gold.

If there are signs of possible job losses in the future, this will affect the FED’s policy for the upcoming meetings, indicating that the pace of future tightening may need to be reduced. However, unless there is a significantly negative outcome, the FED should keep its hawkish position.

The wages component on the NFP report was not as strong as anticipated, which offset the higher-than-expected numbers in non-farm payrolls, according to the market. As a result, there was a greater sense of risk aversion among traders as the trading week came to a close, leading to a surge in demand for safe-haven assets such as Gold and Silver.

The nervousness surrounding the SVB bank in California is also helping Gold prices remain bullish. Gold formed a doji candlestick on Wednesday on the daily chart right at the 100 SMA (green) which is a bullish reversing signal after the decline. XAU/USD ended the week around $50 off the lows but it is facing the 50 SMA (yellow) now, where Gold stopped the climb last week.

Gold XAU Live Chart

GOLD

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.