Gold Price Analysis: XAU/USD consolidates near $1,930, key support line, US NFP probe bears


  • Gold prices seesaw around weekly low after bouncing off an ascending trend line from March 20.
  • Wall Street’s selling rout, central bank buying by developing countries couldn’t recall the bulls amid US dollar strength.
  • Markets may witness the typical pre-NFP trading lull while Sino-American tension and US stimulus headlines may offer intermediate moves.

Gold keeps pullback moves from $1,921.97, the one-week low, near $1,932 during the pre-Tokyo open Asian trading on Friday. The yellow metal dropped for the second day in a row on Thursday despite staging consolidation from near-term key support line. While US dollar strength could be considered as a major driving force for the bullion’s latest downside, traders’ cautious sentiment ahead of the American employment figures can be spotted as probing the bears.

All eyes on NFP…

With the recently mixed US economics, coupled with the Federal Reserve (Fed) policymakers’ dovish tone, August month employment indicators from the world’s largest economy become crucial for markets. The forecast suggests that the headline Nonfarm Payrolls (NFP) to recede from 1,763K prior to 1,400 while the Unemployment Rate may slip to 9.8% versus 10.2% previous readouts. It’s worth mentioning that the monthly prints of the US ADP Employment Change and weekly Jobless Claims couldn’t favor the forecasters with the previous slipping below upbeat expectations and the later keeping the markets hopeful.

Read: Nonfarm Payrolls Preview: Fed’s policy shift to introduce vital noise

Although markets are likely to remain mostly choppy ahead of the US data, the recent escalation in the Sino-American tussle may help the momentum traders. After secretly preparing to combat the US hardships over its tech sector, China openly threatened the Trump administration that it can reduce American debt holding and derail the pressure while being the world’s second-largest holder of the same. The move came in a response to the latest sanctions by the US over Beijing diplomats.

Additionally, chatters concerning the US stimulus may also offer some life to the trading. Recently, the US House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin agreed for stop-gap funding to avoid the government shutdown as the previous bill expires on September 30. Even so, ‘serious differences’ prevail between the opposition Democratic Party and the ruling Republican, as spotted by diplomat Pelosi the previous day.

Elsewhere, the hopes of the coronavirus (COVID-19) vaccine is also gaining momentum but largely failed to entertain the global traders cheering the US dollar’s pullback from a 28-month low.

Overall, gold prices are up for a decisive move ahead of the key data while taking rounds to important technical levels. As a result, traders should ideally wait for the US employment data before taking any big positions.

Technical analysis

A six-month-old support line near $1,925 becomes the key as a break of which will challenge the previous month’s low around $1,865. However, a 50-day SMA level of $1,901 will validate the quote’s clear downside. Meanwhile, sustained trading beyond 21-day SMA close to $1,955 may recall the bulls.

Additional important levels

Overview
Today last price 1930.52
Today Daily Change -11.64
Today Daily Change % -0.60%
Today daily open 1942.16
 
Trends
Daily SMA20 1962.01
Daily SMA50 1896.66
Daily SMA100 1808.04
Daily SMA200 1686.09
 
Levels
Previous Daily High 1973.34
Previous Daily Low 1932.73
Previous Weekly High 1976.79
Previous Weekly Low 1902.76
Previous Monthly High 2075.32
Previous Monthly Low 1863.24
Daily Fibonacci 38.2% 1948.24
Daily Fibonacci 61.8% 1957.83
Daily Pivot Point S1 1925.48
Daily Pivot Point S2 1908.8
Daily Pivot Point S3 1884.87
Daily Pivot Point R1 1966.09
Daily Pivot Point R2 1990.02
Daily Pivot Point R3 2006.7

 

 

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