Gold technical analysis ahead of US NFP data

Gold prices extended gains for the third consecutive day, trading around $2,675.
Uncertainty in US and UK economic conditions has increased gold's safe-haven appeal.
The US Nonfarm Payrolls (NFP) report could determine gold's next major move.

Muhammad Umair, PhD Gold Predictors

Gold (XAU/USD) prices extended gains for the third straight day, trading around $2,675. The uncertainty around US and UK economic conditions has boosted gold's appeal. The market is now waiting for the US Nonfarm Payrolls (NFP) report, which could dictate the metal's next move. Strong job data could strengthen the US dollar and pressure gold prices. However, weak data could support gold by reinforcing expectations of a Federal Reserve pause.

Gold technical analysis

Gold is trading close to a critical decision zone. The resistance lies between $2,720 and $2,790. Breaking above this range could lead prices to $2,900 or higher. A failure to break above may result in consolidation or a pullback.

Support remains firm near $2,640. The long-term trendline supports this level. If prices fall below $2,640, gold could retest $2,560 as the next major support.

Momentum indicators point to a bullish sentiment. Higher lows and increased trading volumes confirm this trend. However, the Relative Strength Index (RSI) signals potential overbought conditions. This could slow gold's rally in the short term.

Traders should also monitor US Treasury yields and the US Dollar Index (DXY). The DXY has risen to 109.18, while real yields have increased slightly. Despite this, gold has maintained strength, showing strong investor demand.

The World Gold Council reported inflows into gold ETFs for the first time in four years. This indicates strong institutional demand. These factors suggest a positive outlook for gold, but caution is needed near resistance levels.

Conclusion: Awaiting US NFP data

Gold prices stay strong due to safe-haven demand and global uncertainties. Resistance at $2,720-$2,790 will likely decide gold's next move. Strong support near $2,640 holds the market steady. The US Nonfarm Payrolls (NFP) report will shape gold's direction. Strong data may lower prices, while weak data could boost prices. Traders should watch economic events and technical levels closely as gold approaches a key moment.

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Author

Muhammad Umair, PhD

Gold Predictors

Muhammad Umair is a financial markets analyst and investor who focuses on the forex and precious metals markets.

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