Gold prices rose to a high of USD 1219.4/Oz levels this week and appears poised to end higher for the second consecutive week.

The metal shot higher from the low of USD 1142.6/Oz, after the surprisingly dovish Fed policy statement was released in the last week. The resulting weakness in the US dollar, which got amplified by short covering in the EUR/USD pair helped the yellow metal rise to a high of USD 1219.4/Oz.

However, we are down to USD 1200/Oz levels as we head closer to the end of trading this week. In the last two trading sessions of this week, we saw the US dollar rebound, mainly on account of a drop in the weekly jobless claims data to a six-week low. The better-than-expected UK services PMI data also helped the greenback recover lost ground. In the process, gold was pushed lower to USD 1200/Oz. The risk aversion in the equity markets and the geopolitical uncertainty in the middle east also eased.

During the next week, we have the US non-farm payrolls data for March due for release. Apart from the Fed’s concern regarding the US dollar, this is the single data piece that could alter the rate hike expectations significantly. Investment bank Goldman Sachs already called a top in the payrolls figure, indicating the pace of job additions could slow down in the future.

Gold range USD 1180-1225 ahead of NFP

Prices are likely to trade in the range of USD 1224.9 (50% Fib retracement of 1307.3-1142.6) – USD 1181.4 (23.6% Fib retracement) ahead of the Friday’s Non-farm payrolls report.

The losses could be restricted at USD 1181.4-

  • • Though we have seen a rebound in the USD, a significant appreciation can be ruled out as the treasury yields are likely to remain weak on the Fed’s weak growth forecasts and due to the weaker-than-expected Q4 GDP data.

  • The equity markets are unlikely to see a sudden rise in risk-on sentiment as investors stay cautious ahead of the NFP report. Thus, Gold could remain supported amid caution ahead of NFP.

  • The disappointing Chinese final PMI readings for March could support the yellow metal.

  • Safe haven flows may increase if Greece issue or tensions in middle east escalate further.

On the other hand, gains could be restricted at USD 1224.9-

  • The European Central Bank, at its April meeting, is likely to sound optimistic regarding the recovery in the Eurozone economy. Meanwhile, another disappointing figure of weekly bond purchases by the ECB could also restrict gains in the yellow metal.

  • The repeated failure in the EUR/USD and the GBP/USD around 1.10 and 1.5 is likely to keep the USD strong. Moreover, the upbeat Eurozone final PMIs may not be sufficient to push the USD significantly lower.

  • Caution ahead of the Non-farm payrolls report, which has beat estimates by a wide margin on the last few occasions- will keep big traders on the sidelines ahead of the report.

A breakout from the range is anticipated post the release of Friday’s non-farm payroll report. A weaker-than-expected figure – below 230K could push Gold well above USD 1224.9/Oz by Friday’s New York closing. We can expect the metal to test and consolidate around the 61.8% retracement at USD 1244.3/Oz.

On the other hand, another stellar jobs report, could push the metal below USD 1181.4/Oz. However, the bearish interest rate forecasts and the downward revisions of the growth forecasts are likely to restrict losses around USD 1165-1170/Oz levels.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar influenced by the hawkish market sentiment surrounding the Federal Reserve and expectations of prolonged higher interest rates. 

EUR/USD News

GBP/USD: The first downside target is seen at the 1.2600–1.2605 zone

GBP/USD: The first downside target is seen at the 1.2600–1.2605 zone

GBP/USD trades on a weaker note around 1.2620 during the early European session on Friday. The decline of Pound Sterling is backed by the growing speculation that the Bank of England will begin the rate-cut cycle this year.

GBP/USD News

Gold ends Q1 2024 at record highs, what’s next?

Gold ends Q1 2024 at record highs, what’s next?

Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.

Gold News

Ripple's move above this key level could trigger nearly 50% rally for XRP

Ripple's move above this key level could trigger nearly 50% rally for XRP

Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days.

Read more

US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount

US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount

The core Personal Consumption Expenditures Price Index is set to rise 0.3% MoM and 2.8% YoY in February. The revised Summary of Projections showed that policymakers upwardly revised end-2024 core PCE forecast to 2.6% from 2.4%.

Read more

Majors

Cryptocurrencies

Signatures