Gold trades sideways on Payrolls caution, $3,540 support holds the key
|- Gold rally pauses as markets take caution ahead of Payrolls.
- $3540 acts as immediate support, Break below will expose $3522.
- Gains remain capped at $3560, Break above extends projections to $3575-$3585-$3607.
- If Payrolls results come higher than consensus, Gold momentum may shift to a correctional shift towards $3483-$3476.
Fundamental drivers
Weak results in the US labour markets as well as expectations of sluggish Payroll data along with rising jobless claims strengthen market speculations of rate cut this middle of the month. Such scenario of economic uncertainties boosts money flow to safe haven assets which makes a strong case for the surge in demand for Gold.
Trump tariff, Court intervention, shift in Global power paradigm, growing efforts to challenge dollar dominance, sharp rise in Central Banks Gold purchases, etc form a strong set of triggers that add tailwind to Gold rush and recent $3578 high may be just a hint that the new bull run is just beginning.
However, the broad markets remain somewhat cautious ahead of key Non Farm Payrolls scheduled for release today before New York comes to desks.
There is a possibility that break below important support base will open a sizeable correction before the bullish rally extends higher.
Technical perspective
There has been a brief and symbolic pause in bullish momentum as markets prioritize caution just before important Non Farm Payrolls numbers for the month of August are released and markets gather clues for Dollar, bonds and Gold.
Today's trading has witnessed Gold finding support at $3540 and prices are hovering below $3550 waiting for the Jobs report and a quick reaction to Dollar and Gold range breakout.
Break below $3540 will prompt decline to next support zone $3522-$3513.
If this zone fails to hold, next drop can extend to $3483-$3476.
Note
Gold is sitting close to record high and is prone to profit booking.
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