Gold price is resuming its uptrend above $1,800, as bulls regain momentum amid renewed weakness in the US Dollar ahead of the US employment data. Gold price needs a weekly close above 200 Daily Moving Average to unleash further upside. Gold price is retreating to test the critical 200-Daily Moving Average (DMA) at $1,796, at the time of writing. Gold bulls reclaimed that barrier for the first time since mid-June on Thursday.
The 14-day Relative Strength Index (RSI) has turned flat just beneath the overbought territory, justifying the latest leg down in Gold price. Should the 200DMA resistance-turned-support give way, then a drop toward the November 15 high at $1,787 cannot be ruled out. The next corrective target is seen at the previous day’s low of $1,768, below which floors will open up for a test of the bullish 21DMA at $1,749.
Alternatively, Gold buyers year for a weekly closing above the 200DMA, above which the $1,800 mark will be challenged once again. Further up, the previous day’s high at $1,805 and the August 10 top at $1,808 will be put to test.
Gold price is reversing from a fresh four-month high above $1,800, as bulls take a breather before the United States Nonfarm Payrolls (NFP)-led massive volatility storm. The US Dollar has paused its downward trajectory amid a minor uptick in the US Treasury bond yields and a cautious market mood.
All eyes on United States Nonfarm Payrolls
The US Dollar is consolidating recent declines to four-month troughs against its major peers, fueling a minor correction in the Gold price from the highest levels since July reached at $1,805 early Friday. The minor uptick in the US Treasury bond yields is also exerting downward pressure on the non-interest-bearing Gold price. Investors are looking to take profits on their USD short positions ahead of the all-important United States Nonfarm Payrolls data.
Shubham Arora, Senior Analyst at signalsfactory explains, “My baseline scenario is for the Nonfarm Payrolls to be somewhere between 150,000 and 200,000, above real expectations, thus triggering a short-lived upward move in the US Dollar. From there, it could turn down and resume its decline. Even a read of 250,000 would likely trigger such a two-sided move. This outcome has a high probability.”