Basic Overview
Gold has been steadily rising this week since bouncing off the recent range low. Weak US job openings data on Wednesday gave it the support it needed to push towards key resistance at 2530.
The move was driven by lower real yields, as weaker US data has pushed the market into a more bearish stance on the non-farm payrolls report. This puts gold’s recent rally at risk if the non-farm payrolls report comes out better than expected, as real yields will reverse the recent decline.
In the bigger picture, gold is expected to remain supported as real yields decline due to the Fed’s rate-cutting cycle, but in the near term, strong US data may weigh on the market slightly.
Technical Analysis of Gold – Daily Time Frame
Gold daily
On the daily chart, we can see that gold eventually bounced back to the support area around the 2480 level. We are now trading near the top of the range where we can expect sellers to step in with a defined risk above the resistance to place a position for a break of support. On the other hand, buyers will want to see the price break above the resistance to increase bullish bets to new highs.
Gold Technical Analysis – 4 Hour Time Frame
Gold 4 hours
On the 4-hour chart, we can more clearly see the range between the 2480 support level and the 2530 resistance level. Market participants continued to “play the range” by buying at support and selling at resistance, and today’s NFP release is likely to trigger a breakout on either side.
Technical Analysis of Gold – 1 Hour Time Frame
gold 1 hour
On the 1-hour chart, we can see that once the price broke the downtrend line, more buyers rushed to position themselves in preparation for a rally towards the resistance level. Today’s non-farm payrolls report is the most important of the year, so its impact on the market is likely to be huge.
The red lines mark the average daily range for today, but I manually expanded the range as the indicator is based on the previous five days where we stayed in the range only. So, don’t rely too much on today’s average daily range.
Upcoming incentives
Today we wrap up the week with the US Non-Farm Payrolls report, where the consensus expects 160,000 jobs added and an unemployment rate of 4.2%.