Gold: Cautiously bid around $1510 ahead of the US NFP, Fedspeak

  • Gold holds on to recovery gains for the fourth consecutive day ahead of the US NFP.
  • UK/US politics, Asian developments, and trade headlines support the bullion during the early day.
  • Bond yields stay little changed, Asian stocks mixed amid cautious sentiment.

With the multiple catalysts pushing investors to risk-safety, Gold prices remain on the recovery mode while taking bids to $1510 during early Friday.

The yellow metal recently benefited from the global slowdown fears and political uncertainty surrounding the US and the UK. However, China’s absence for the week and traders’ cautious mood ahead of the key US employment report keep a tab on the north-run.

As a result, the US 10-year Treasury yields make the rounds to 1.54% while Asian equities stay mixed with NIKKEI and HANG SENG marking losses while the ASX 200 and the NZX50 flashing contrasting signals.

During the early Asian session, news signaling likely support to the US President Donald Trump’s impeachment and uncertainties to the Brexit proposal favored the bullion. Adding to the sentiment was the White House Economic Adviser Navarro’s comments that there would not be any small trade deal with China, which in turn raises the odds for one more round of failed talks between the US and Chinese diplomats.

Also adding to the precious-metals’ strength are downbeat signals from the Reserve Bank of Australia’s (RBA) bi-annual Financial Stability Review (FSR) and also concerning Japan.

Statements from the Australia and New Zealand (ANZ) Bank’s report, “Investors continue to flood into the gold-backed ETFs, with holdings extending their streak of daily inflows to 13 days. It wasn’t all good news, with Indian gold imports slumping 86% y/y in September,” also reasons the safe-havens run-up.

While recently worrisome signals from the forward-looking indicators confuse market players about the September month jobs report, Westpac says, “US Sep nonfarm payrolls are anticipated to increase by 145k, broadly in line with the six month average of +150k. Factors in play this month include widespread retail store closures, hiring related to the census, softness in manufacturing but implied strength in very low jobless claims data. The unemployment rate is seen to hold at 3.7% while the annual pace of average hourly earnings continues to track at 3.2%yr.”

In addition to the employment data, comments from the US Federal Reserve Chairman at a Fed Listens event including other policymakers of the US central bank will also be closely observed for fresh direction.

Technical Analysis

FXStreet Analyst Ross J Burland highlights the importance of $1,535 resistance to support bulls cheering the break of $1,500:

“Having recovered from below a 50% mean reversion of the late June swing lows to recent highs around 1460/70, the price of Gold is turning heads again as the bulls seek out a run back towards the 1520 level. They will have eyes on the 1535 resistance level. On a break of that resistance that has proven to be robust on recent attempts, bulls will then look to a 1550 target ahead of 1,590 as the 127.2% Fibo target. On the downside, bears are looking to the 19 July swing highs down at 1452.93. Eyes will then be on the 61.8% Fibo of the same range at 1449.56 ahead of a full 100% retracement to 1380.”

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