Gold: Key US Jobs Data in Focus

Gold has seemingly entered into a consolidation range, as investors await the U.S. ADP private jobs report due tonight (-21 million jobs in April estimated)...

Gold 4

Spot gold retreated 0.8% last week, pressured by lockdown lifts and optimism on economic restarts in major countries. However since then, it posted a three-day rebound after reaching a low near $1,671 on May 1, supported by cautions on relaxing coronavirus related restrictions prematurely and expectations that central banks would keep ultra-low interest rates for a certain period of time.

Gold has seemingly entered into a consolidation range, as investors await the U.S. ADP private jobs report due tonight (-21 million jobs in April estimated) and the non-farm payrolls this Friday. It is worth noticing that the market is already anticipating gloomy employment data, where the actual outcome may not take anyone by surprise.

From a technical point of view, spot gold maintains a modestly bullish bias as shown on the 30-minute chart. It is currently trading within a consolidation range, after a technical rebound, where a bullish RSI divergence was spotted. The level at $1,692, which is a recent turning point, may be considered as the nearest intraday support level. A break above the nearest resistance at $1,714 would be needed for gold to gather more upside momentum and open a path to $1,730. In an alternative scenario, losing $1,692 may trigger a pull-back to $1,682 and $1,671 on the downside.

Source: TradingView, Gain Capital

For the longer-term as shown on the daily chart, spot gold is holding up well after surging past its prior high. Despite a modest pull-back, the previous resistance level now acts as a support, which were tested several times. It is now trading within a symmetrical triangle, following a rally previously. Bullish investors might consider $1,655 as the nearest support, with potential upside targets at $1,748 and $1,790. Alternatively, a break below $1,655 may suggest gold is heading back to $1,610 and $1,575.

Source: TradingView, Gain Capital


More from Gold

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.