Gold outlook: Bulls consolidate under new record high ahead of key US data
|Gold
Gold edged lower in early Thursday on partial profit-taking from the steep rally in past seven days, which broke above $3500 and hit new record high at $3578, advancing over 7% from the Aug 20 higher low at $3310 and gaining around 2% on rally above $3500.
Gold was inflated by growing expectations for Fed rate cut this month, while political turmoil on the US over President Trump’s pressure on the central bank and the court questioning legality of US import tariffs, adding to uncertainty and boosting safe haven demand.
Markets await release of US NFP report, which is likely to seal the decision for rate cut, if August figures disappoint again, after reports in past few months showed sharp decline in hiring that points to weakening in the labor sector, one of four pillars of the economy.
The yellow metal has again entered uncharted territory after breach of previous peak ($3500) and came ticks ahead of next targets at $3589 (Fibo projection) and $3600 (round figure), where strongly overbought daily studies prompted traders to collect some profits.
Limited dips so far stayed above strong support at $3500, suggesting that bullish sentiment remains strong and traders look for better levels to re-enter strong bullish market for fresh acceleration higher.
Thursday’s daily candle was so far red (the first in eight days) but with long tail which signals still strong bids and contributes to scenario of positioning ahead of bullish continuation.
Next good supports below $3500 lay at $3452/38 (former tops) where extended dips should find firm ground and keep larger bulls in play.
Res: 3564; 3578; 3589; 3600.
Sup: 3510; 3500; 3452; 3438.
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