Gold’s Stability Amidst Crucial US Employment Reports: A Technical Insight
During Friday’s Asian trading window, the Gold price (XAU/USD) displayed a modest uptick, momentarily halting its nine-day decline, as it hovers around $1,813 – a seven-month nadir reached just a day prior. Despite this ascent, a substantial rally remains doubtful. Investors might adopt a cautious stance as they await the pivotal US monthly job statistics, slated for release later on the same day.
The forthcoming Nonfarm Payrolls (NFP) publication is anticipated to sculpt market perceptions regarding the Federal Reserve’s upcoming interest rate trajectory, offering a renewed momentum to gold’s valuation. Concurrently, the ongoing discussion about the Federal Reserve’s prospective policy adjustments bolsters the strength of US bond yields. This buoyancy aids the US Dollar (USD) in counteracting its two-day receding trend from its annual zenith, potentially limiting Gold’s gains.
The prevalent market sentiment leans towards the Federal Reserve maintaining its assertive approach, a perspective strengthened by robust US macroeconomic indicators. These indicators align with projections of a robust economic surge in Q3. Moreover, enhanced US employment figures could intensify wage and inflationary pressures, possibly compelling the Federal Reserve to sustain elevated interest rates. Such a scenario would fortify the USD, thereby exerting downward pressure on the GOLD price pegged to the US Dollar.
Technical Overview
Technically, GOLD is encountering what’s termed as a ‘death cross’, characterized by the 50-day Simple Moving Average (SMA) slipping beneath the crucial 200-day SMA – a pattern unseen since July 2022.
This suggests gold might face heightened bearish tendencies. However, the daily chart’s Relative Strength Index (RSI) hints at potential oversold scenarios in the short term. It would be judicious for traders to anticipate slight market consolidation or a minimal upward correction before anticipating further dips. Still, the prevailing technical indicators predominantly favor bearish market participants, hinting that XAU/USD’s path might lean downwards.
From its current position, any upward trajectory might encounter significant resistance around the $1,830-$1,832 bracket. Surpassing this could trigger a short-term bullish rally, potentially propelling GOLD towards the $1,850 threshold. While a continuation of this uptrend is plausible, it’s expected to face a ceiling around the $1,858-$1,860 range. Conversely, the immediate robust support seems to be at the $1,815-$1,813 interval, nearing its multi-month lowest. If gold breaches the psychological barrier of $1,800, it could reveal the subsequent crucial support, hovering between $1,770 and $1,760.
ABOUT THE AUTHOR
See More
Sidebar rates
Add 3442
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals