GOLD buyers take a breather after poor US NFP-inspired comeback
Gold price pauses its previous recovery rally amid a quiet start to a new week on Monday.
The US Dollar attempts a tepid rebound after sinking on poor US labor data on Friday.
Gold price regains crucial daily averages as the RSI turns bullish; immediate resistance aligns at $3,380.
Gold price has paused its two-day recovery mode while trading at around $3,350 early Monday, digesting the huge reaction to the dismal US NFP data released on Friday.
Risk aversion extends into early Monday’s trading as concerns over the health of the US economy re-emerge in the aftermath of the disappointing labor market report on Friday.The Bureau of Labor Statistics reported Friday that the US economy added 73,000 jobs for July, above the June revision of 14,000 but below even the meagre estimate for a gain of 110,000. The Unemployment Rate ticked higher to 4.2% in the month, as expected.
A slump in the US labor market ignited fears over the resilience of the US economy as a whole, raising concerns over the current patient policy stance by the Fed amid potential tariff impact on inflation.
Following the data, markets ramped up the odds for a September Fed rate cut to about 80% from 50% pre-NFP release, according to the CME Group’s FedWatch Tool.
The dovish shift in sentiment around the Fed expectations smashed the US Treasury bond yields across the curve alongside the US Dollar, lifting Gold price decisively from monthly troughs.
Additionally, the Greenback bore the brunt of US President Donald Trump firing the US Labor Department’s statistical leader, Erika L. McEntarfer, after weaker-than-expected jobs report.
Renewed USD selling interest helped Gold price extend its recovery momentum. However, it remains to be seen if the bright metal could sustain the upswing in the day ahead.
The Greenback could resume its downtrend amid fresh US economic jitters and rife speculations that the dismissal of BLS Commissioner Erika McEntarfer may be part of a broader strategy to undermine the credibility of official inflation data, eventually impacting the Fed’s independence.
Also, in focus remains tariff developments, with US-Canada trade talks likely to influence the market sentiment, eventually impacting the USD trades and the Gold price action.
Daily technical analysis
After Gold price defended the critical 100-day SMA and recaptured the 21-day and 50-day SMAs on a weekly closing basis, the technical setup on the daily chart has turned in favor of buyers.
The 14-day RSI is sitting above the midline, currently near 52, suggesting that the recovery will likely extend in the coming days.Adding credence to the bullish potential, the 21-day is primed to cross the 50-day SMA for upside, which if materialized on a daily closing basis will confirm a Bull Cross.
The immediate resistance is now seen at the previous rising trendline support at $3,380. If buyers find a strong foothold above that level, the next upside targets are aligned at the $3,400 threshold and the $3,440 static resistance.
On the flip side, strong support is placed at the 21-day SMA and 50-day SMA confluence near $3,342.
A sustained move below that level will open up further downside toward the $3,300 round figure. The line in the sand for Gold buyers is the 100-day SMA at $3,275.
GOLD buyers take a breather after poor US NFP-inspired comeback
Gold price has paused its two-day recovery mode while trading at around $3,350 early Monday, digesting the huge reaction to the dismal US NFP data released on Friday.
Risk aversion extends into early Monday’s trading as concerns over the health of the US economy re-emerge in the aftermath of the disappointing labor market report on Friday.The Bureau of Labor Statistics reported Friday that the US economy added 73,000 jobs for July, above the June revision of 14,000 but below even the meagre estimate for a gain of 110,000. The Unemployment Rate ticked higher to 4.2% in the month, as expected.
A slump in the US labor market ignited fears over the resilience of the US economy as a whole, raising concerns over the current patient policy stance by the Fed amid potential tariff impact on inflation.
Following the data, markets ramped up the odds for a September Fed rate cut to about 80% from 50% pre-NFP release, according to the CME Group’s FedWatch Tool.
The dovish shift in sentiment around the Fed expectations smashed the US Treasury bond yields across the curve alongside the US Dollar, lifting Gold price decisively from monthly troughs.
Additionally, the Greenback bore the brunt of US President Donald Trump firing the US Labor Department’s statistical leader, Erika L. McEntarfer, after weaker-than-expected jobs report.
Renewed USD selling interest helped Gold price extend its recovery momentum. However, it remains to be seen if the bright metal could sustain the upswing in the day ahead.
The Greenback could resume its downtrend amid fresh US economic jitters and rife speculations that the dismissal of BLS Commissioner Erika McEntarfer may be part of a broader strategy to undermine the credibility of official inflation data, eventually impacting the Fed’s independence.
Also, in focus remains tariff developments, with US-Canada trade talks likely to influence the market sentiment, eventually impacting the USD trades and the Gold price action.
Daily technical analysis
After Gold price defended the critical 100-day SMA and recaptured the 21-day and 50-day SMAs on a weekly closing basis, the technical setup on the daily chart has turned in favor of buyers.
The 14-day RSI is sitting above the midline, currently near 52, suggesting that the recovery will likely extend in the coming days.Adding credence to the bullish potential, the 21-day is primed to cross the 50-day SMA for upside, which if materialized on a daily closing basis will confirm a Bull Cross.
The immediate resistance is now seen at the previous rising trendline support at $3,380. If buyers find a strong foothold above that level, the next upside targets are aligned at the $3,400 threshold and the $3,440 static resistance.
On the flip side, strong support is placed at the 21-day SMA and 50-day SMA confluence near $3,342.
A sustained move below that level will open up further downside toward the $3,300 round figure. The line in the sand for Gold buyers is the 100-day SMA at $3,275.
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