Is GOLD primed for a pullback on prelim NFP Benchmark Revision?
Gold keeps printing fresh record highs, tests $3,650 while adding over 1.5% so far this week.
US Dollar mires in seven-week lows across the board ahead of the Nonfarm Payrolls Benchmark Revision.
Bets for aggressive Fed rate cuts are back on the table after poor US jobs data.
Heavily overbought RSI on the daily chart warrants caution for buyers, a pullback in the offing?
Gold is testing offers above $3,650 early Tuesday as the record run remains unabated amid a sustained bearish bias in the US Dollar and a slightly positive risk tone.
The USD resumes its downtrend following a brief recovery in Monday’s Asian trading, sitting at the lowest level in seven weeks against its six major currency rivals.Intensifying bets over aggressive interest rate cuts by the US Fed this year, in the face of deteriorating labor market conditions and high stagflation risks, remain a drag on the Greenback.
The dovish Fed expectations and broad USD weakness continue to power the record rally in Gold, with the non-yielding bullion up nearly 1.8% so far this week.
The BLS showed Friday that the headline US NFP increased by 22,000, far below forecasts of 75,000, while the Unemployment Rate climbed to 4.3%, the highest level since late 2021.
Markets are pricing in an 89.4% chance of a 25 basis points (bps) rate cut at the Fed’s September meeting and a 10.6% probability of a jumbo 50 bps rate cut, according to the CME Group’s FedWatch tool.
There are speculations that the Fed could deliver more than two rate cuts this year. That said, attention now turns to the preliminary US NFP Benchmark Revision due later in the day, which will cover the period from April 2024 to March 2025.
Economists are expecting a downward revision of as much as 800,000 jobs, which could signal that the Federal Reserve is lagging in its efforts to achieve maximum employment, per Reuters.
Gold could witness a ‘sell the fact’ trade if the NFP revision is downgraded as widely expected, with sellers finding additional support from the overbought conditions on the daily chart.
Daily technical analysis
The daily chart shows that the 14-day RSIremains in a heavily overbought zone. The leading indicator is currently above 80.
Any pullback in Gold could challenge the immediate support located at the $3,600 round number, below which the previous day’s low of $3,578 could be tested.
A sustained break below the latter will open up a fresh downside toward the $3,550 psychological mark.
However, if buyers refuse to give up, the next topside barrier is seen at the $3,700 level, above which the $3,750 region could offer some resistance.
Is GOLD primed for a pullback on prelim NFP Benchmark Revision?
Gold is testing offers above $3,650 early Tuesday as the record run remains unabated amid a sustained bearish bias in the US Dollar and a slightly positive risk tone.
The USD resumes its downtrend following a brief recovery in Monday’s Asian trading, sitting at the lowest level in seven weeks against its six major currency rivals.Intensifying bets over aggressive interest rate cuts by the US Fed this year, in the face of deteriorating labor market conditions and high stagflation risks, remain a drag on the Greenback.
The dovish Fed expectations and broad USD weakness continue to power the record rally in Gold, with the non-yielding bullion up nearly 1.8% so far this week.
The BLS showed Friday that the headline US NFP increased by 22,000, far below forecasts of 75,000, while the Unemployment Rate climbed to 4.3%, the highest level since late 2021.
Markets are pricing in an 89.4% chance of a 25 basis points (bps) rate cut at the Fed’s September meeting and a 10.6% probability of a jumbo 50 bps rate cut, according to the CME Group’s FedWatch tool.
There are speculations that the Fed could deliver more than two rate cuts this year. That said, attention now turns to the preliminary US NFP Benchmark Revision due later in the day, which will cover the period from April 2024 to March 2025.
Economists are expecting a downward revision of as much as 800,000 jobs, which could signal that the Federal Reserve is lagging in its efforts to achieve maximum employment, per Reuters.
Gold could witness a ‘sell the fact’ trade if the NFP revision is downgraded as widely expected, with sellers finding additional support from the overbought conditions on the daily chart.
Daily technical analysis
The daily chart shows that the 14-day RSIremains in a heavily overbought zone. The leading indicator is currently above 80.
Any pullback in Gold could challenge the immediate support located at the $3,600 round number, below which the previous day’s low of $3,578 could be tested.
A sustained break below the latter will open up a fresh downside toward the $3,550 psychological mark.
However, if buyers refuse to give up, the next topside barrier is seen at the $3,700 level, above which the $3,750 region could offer some resistance.
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