Gold faces key test ahead of NFP data
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Gold is on the rise, meets familiar resistance area.
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Technical signals are bullish but not far from overbought levels.
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US nonfarm payrolls due at 13:30 GMT.
Gold is at a key juncture, testing a crucial resistance level just ahead of the NFP data release. It needs to close above the trendline zone of 2,678-2,680 to continue its recovery. While technical indicators like the RSI and stochastic suggest continued buying interest, they're also nearing overbought territory, which could limit further gains in the short term.
Hence, for buyers patience could be key. Should the bulls successfully knock down the wall at 2,680 and perhaps show their teeth above the psychological mark of 2,700, the door could open for 2,720, which ceased upside movements twice in November and December. Beyond that, resistance could next develop around the 2,750 barrier.
If the upward momentum falters, support could immediately come from the 2,660 area and the 20-period simple moving average (SMA), with further protection from the 50- and 200-period SMAs near 2,635-2,645. A steeper decline could meet the support trendline near 2,615. If there are more losses below the 2,600 round-level, traders may target the 2,570-2,580 region.
In summary, gold is at a critical point, waiting for a decisive push above 2,680 to attract more buyers.
Author
Christina joined the XM investment research department in May 2017. She holds a master degree in Economics and Business from the Erasmus University Rotterdam with a specialization in International economics.
