Gold Price Forecast: Dollar pullback caps the upside ahead of NFP
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get all exclusive analysis, access our analysis and get Gold and signals alerts
Elevate your trading Journey.
UPGRADE- Gold draws support from renewed US-China tensions, risk-off mood.
- Dollar rebound could cap gains but buy the dips to remain in play.
- Technicals warrant correction, US NFP to be the key decider?
Gold (XAU/USD) built on the ongoing rally and refreshed all-time highs at $2075.32 on Friday before pulling back sharply towards $2050, as focus shifts to the US Non-Farm Payrolls data (NFP) for a fresh direction. The upside bias remains intact as markets expect the US economy to add 1600K jobs in July vs. 4800K job gains seen in June, suggesting that the worsening coronavirus situation is slowing down the jobs growth.
Although, the bulls will face an uphill task to regain the winning momentum, as the renewed US-China flare-up has triggered sharp losses in the equities and US stock futures, which boosted the haven demand for the US dollar across the board. The risk sentiment soured after US President Donald Trump signed two executive orders against WeChat and TikTok (Chinese apps) to address the security threat. The move could add fuel to the ongoing tensions between the world’s two largest economies, as the trade leaders from both nations meet next week to discuss the trade deal. Also, the focus remains on the impending US fiscal stimulus and likely Trump’s action on the unemployment benefits.
Short-term technical perspective
Gold: Hourly chart
XAU/USD charted a rising wedge breakdown on the hourly chart following a close below the $2060 level. The bearish break opens doors for a test of the pattern target at $2000 mark.
Ahead of the upward-sloping 50-hourly Simple Moving Average (HMA) at $2048 could offer some respite the bulls. Selling pressure will intensify below the latter, with the next downside target seen at the bullish 100-HMA at $2016.
The hourly-Relative Strength Index (RSI) has turned flat at the midline, suggesting that the bears could likely lack any follow-though.
Any rebound will face stiff resistance at $2060, the convergence of the previous pattern support-turned-resistance and upward-sloping 21-HMA.
Acceptance above which a test of the record highs will be inevitable. Thereafter, bulls will aim for the $2100 threshold.
Gold: Additional levels to consider
- Gold draws support from renewed US-China tensions, risk-off mood.
- Dollar rebound could cap gains but buy the dips to remain in play.
- Technicals warrant correction, US NFP to be the key decider?
Gold (XAU/USD) built on the ongoing rally and refreshed all-time highs at $2075.32 on Friday before pulling back sharply towards $2050, as focus shifts to the US Non-Farm Payrolls data (NFP) for a fresh direction. The upside bias remains intact as markets expect the US economy to add 1600K jobs in July vs. 4800K job gains seen in June, suggesting that the worsening coronavirus situation is slowing down the jobs growth.
Although, the bulls will face an uphill task to regain the winning momentum, as the renewed US-China flare-up has triggered sharp losses in the equities and US stock futures, which boosted the haven demand for the US dollar across the board. The risk sentiment soured after US President Donald Trump signed two executive orders against WeChat and TikTok (Chinese apps) to address the security threat. The move could add fuel to the ongoing tensions between the world’s two largest economies, as the trade leaders from both nations meet next week to discuss the trade deal. Also, the focus remains on the impending US fiscal stimulus and likely Trump’s action on the unemployment benefits.
Short-term technical perspective
Gold: Hourly chart
XAU/USD charted a rising wedge breakdown on the hourly chart following a close below the $2060 level. The bearish break opens doors for a test of the pattern target at $2000 mark.
Ahead of the upward-sloping 50-hourly Simple Moving Average (HMA) at $2048 could offer some respite the bulls. Selling pressure will intensify below the latter, with the next downside target seen at the bullish 100-HMA at $2016.
The hourly-Relative Strength Index (RSI) has turned flat at the midline, suggesting that the bears could likely lack any follow-though.
Any rebound will face stiff resistance at $2060, the convergence of the previous pattern support-turned-resistance and upward-sloping 21-HMA.
Acceptance above which a test of the record highs will be inevitable. Thereafter, bulls will aim for the $2100 threshold.
Gold: Additional levels to consider
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.