Gold outlook: Bullish bias above $3,325, US fiscal uncertainty underpins
XAU/USD
Gold was firmer on Friday morning and recovered a part of post-NFP losses.
The metal is on track for a weekly gain after being in red for two consecutive weeks that adds to positive signals, as the price remains at the upper side of larger consolidation range ($3500/$3120).
Negative impact from upbeat US labor data was short-lived, with growing fiscal concerns after the US Congress passed President Trump’s tax-cut and spending bill (which will add $3.4 trillion to a massive US debt) expected add pressure on dollar and underpin safe-haven demand.
Technical picture on daily chart is still mixed as near-term action remains supported by thickening daily Ichimoku cloud, but positive signal being countered by 14-d momentum still in negative territory and overbought stochastic.
Near-term bias is expected to remain with bulls while the price holds above $3325 (broken Fibo 38.2% of $3452/$3246) though sustained break above cracked $3350 barrier (50% retracement / daily Kijun-sen) and $3365 (Thursday’s high) required to strengthen near-term structure and shift focus on targets at $3373 (Fibo 61.8%) and $3400 (psychological).
However, Friday’s action is likely to be less dynamic due to lower volumes, as US markets will shut for Independence Day.
Res: 3345; 3350; 3365; 3373.
Sup: 3325; 3311; 3308; 3300.
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Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
