- The dollar fell after several reports showed a mixed picture of the economy.
- The US private sector employed another 99,000 individuals, missing the estimate of 144,000.
- Investors will pay close attention to the upcoming nonfarm payrolls report.
Gold price analysis points to solid bullish momentum as the yellow metal trades near one-week highs. Gold rallied in the previous session as the dollar fell following mixed economic signals. A weak dollar makes bullion cheaper for foreign traders, increasing demand.
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On Thursday, the dollar fell after several reports showed a mixed picture of the economy. Still, expectations of a rate cut remained high, putting pressure on the currency and supporting gold.
The US private sector employed another 99,000 individuals, missing the estimate of 144,000. This was a red flag for the labor market, raising the chances that the non-farm payrolls report would also be poor. A weak labor market increases the likelihood of a rate cut by 50 basis points, which is bullish for gold. At the same time, it increases the risk of recession. In times of economic uncertainty, investors run to safe havens like gold.
However, other US economic reports showed a slightly different picture. Jobless claims fell more than expected last week, easing fears of high unemployment. At the same time, business activity in the service sector jumped, demonstrating economic resilience. Clearly, there are pockets of strength and weakness in the US economy. However, the Fed’s focus is the labor market.
Accordingly, investors will pay close attention to the upcoming nonfarm payrolls report. A weaker-than-expected performance is likely to raise bets on a rate cut and lift gold prices to new highs.
Gold Key Events Today
- Average hourly earnings in the US m/m
- Change in non-farm employment in the US
- Unemployment rate in the US
Gold price technical analysis: Bulls stagnate at $2,520 resistance
On the technical side, gold is retesting the 2520.09 resistance level, with price above the 30-SMA. At the same time, the RSI supports the bullish momentum above 50. Therefore, the bias is bullish. Notably, gold consolidated for a while between support at 2480.38 and resistance at 2520.09.
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The previous trend was bullish, increasing the chances that the price will break above the range resistance. However, the RSI is showing weaker bullish momentum as it trades in a bearish channel. Therefore, in order to break above the channel resistance and make a new high, the bulls need an increase in momentum.
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