Gold: Acceptance above $2060 to see a test of $2100

Gold (XAU/USD) built on the ongoing rally and refreshed all-time highs at $2075.32 on Friday before pulling back sharply towards $2050. Now, the yellow metal is trading around the $2060 region as the US dollar pullback caps the upside ahead of NFP. Technically, above $2060, gold will retest records highs with a probable test of $2100, FXStreet’s Dhwani Mehta briefs.

Key quotes

“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.” 

“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-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.”