Gold pulls back from one week high as traders portray pre-NFP caution

Even if the US Dollar Index (DXY) weakens to the nine-day low, Gold prices retrace from one week high while declining to $1,510.65 by the press time of the pre-European session on Friday.

The yellow metal seems to witness the pre-NFP silence as traders prefer locking profits ahead of the key employment data from the United States (US). Better than forecast print of China’s Caixin Manufacturing Purchasing Manager Index (PMI) could also be considered as an additional burden on the bullion.

Comments from China’s ruling Communist Party, at the end of a four-day-long private meeting, highlight risks while one Parliament official is spotted by Reuters to consider warning if anybody intervenes in Hong Kong matter. Additionally, the US announced fresh sanctions on Iran and Bloomberg quoted Chinese officials doubting any strong trade relationship with the US beyond phase one deal.

The US 10-year treasury yields stay mostly unchanged around 1.70% after losing nearly eight basis points (bps) the previous day whereas Asian stocks also recover from the early-day declines.

Looking forward, October month employment numbers from the US, including the headline Nonfarm Payrolls (NFP), Unemployment Rate and Average Hourly Earnings, will trigger the key risk sentiment. Markets anticipate a modest increase in earnings to confront downbeat unemployment and NFP figures. Additionally, the US ISM Manufacturing PMI and speeches from the Federal Reserve (Fed) policymakers will also direct the yellow metal’s moves.

Technical Analysis

While October month high surrounding $1,520 acts as an immediate upside barrier, the quote’s dip below 50-day Simple Moving Average (SMA) level of $1,504 highlights a monthly rising trend line around $1,483.