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Gold Attempting to Break Above the Range As USD Retreats

Gold surged higher yesterday after yet another soft US employment report, approaching the 20 daily SMA at $2,350 and the top of the range. The recent US employment reports have shown some weaker figures, which has increased the demand for Gold, with buyers eyeing the record high from back in March.

Gold jumped by around 2% yesterday

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The price of Gold experienced a brief decline below $2,300 following the release of the NFP report on Friday. However, it quickly recovered, demonstrating resilience in the face of market volatility. Moreover, yesterday, Gold prices pushed even higher after the release of soft US unemployment claims numbers.

This indicates that gold traders are more inclined to push the price higher rather than lower, suggesting a bullish sentiment in the gold market. Gold is often seen as a safe-haven asset, particularly during times of economic uncertainty or market turbulence. The resilience and upward movement in gold prices despite fluctuations in other economic indicators may reflect investors’ desire to hedge against risks and uncertainties in the global economy.

Gold Chart H4 – The Price Remains Confined Between MAs

However, recent weaker-than-expected US employment figures for April, including the soft Non-Farm Payrolls (NFP) report, along with this week’s soft US unemployment claims, have contributed to a bearish sentiment surrounding the US dollar (USD). The subdued economic data has increased speculation about the Federal Reserve (Fed) potentially implementing a rate cut sooner rather than later to support economic recovery.

This expectation has led traders to turn towards gold as a hedge against potential inflation and currency depreciation, rather than US Treasuries. Gold is often viewed as a safe-haven asset and a store of value during times of economic uncertainty or when fiat currencies weaken. Therefore, the bearish outlook on the USD and the prospect of accommodative monetary policy measures by the Fed have bolstered demand for gold among traders seeking to protect their portfolios from currency devaluation and inflationary pressures.

As a result, gold prices may continue to see upward momentum in the near term as traders adjust their positions in response to evolving economic data and central bank policies. However, market sentiment and geopolitical developments will also play a significant role in shaping the future trajectory of gold prices.

Gold Live Chart

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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.
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