Gold breaking key support, below $1330

  • Metal falls to the lowest in two weeks. 
  • USD extends gains after upbeat NFP. 

The rally of the US dollar and rising US bond yields pushed gold sharply to the downside. The US official employment report triggered an appreciation of the greenback and boosted US bond yields. 

Labor market data showed that wages rose in January at the fastest rate since 2009. Those numbers could anticipate higher inflation. Despite the potential signal of higher inflation expectation, gold failed to benefit and lost ground. 

The yellow metal dropped from $1,345/oz, first to the $1,333 area and recently slide below $1,330. The area around $1,330 was a strong short-term support that capped the decline several times since last Tuesday. 

The yellow metal bottomed at $1,327.50, $20 below today’s high. It was hovering below $1,330 facing significant bearish pressure. A recovery above $1,332 could remove that pressure. 

Levels to watch 

Below the daily low, the next support might be seen at $1,324 (Jan 18 low) and then at $1,315 and $1,308 (Jan 10 low). On the upside, $1,333 is now the immediate resistance followed by $1,344 and $1,350 (Feb 2 high). 
 

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