VOT Research Desk
Following a poor day on Friday, the price of gold is regaining upward momentum above the $1,800 level as bulls take back control at the beginning of a new week. While awaiting the US ISM Services PMI, the United States Dollar (USD) continues to be pulled downward by gravity despite the return of risk flows.
The Nonfarm Payrolls climbed by 263,000 in November vs the 200,000 predicted, according to data released by the United States Bureau of Labor Statistics (BLS) on Friday, while the Unemployment Rate held steady at 3.7%.
The average hourly earnings as a measure of annual wage inflation increased from 4.9% in October to 5.1%.
The Labor Force Participation Rate, meanwhile, fell from 62.2% to 62.1%. US labor market data that was mixed offered the country a brief lift.
Dollar, but the bears retaliated violently. The dovish remarks made by Federal Reserve Chair Jerome Powell earlier in the week were brought back to memory by the markets.
The Core PCE Price Index, the favored inflation indicator of the Federal Reserve, fell to 5% YoY in October from 5.2% in September. The results supported the recent dovish Federal Reserve tilt and revealed signs of falling inflation.
Technical Analysis of gold:
The price of gold has surpassed the peak set on August 10 at $1,808 and is currently moving toward the peak set on July 4 at $1,814.
After closing the week above the pivotal 200-Daily Moving Average (DMA) at $1,796 on Friday, bulls are still in charge.
The 14-day Relative Strength Index (RSI) has levelled out just below the overbought region, indicating probable upward movement for the price of gold. The round $1,820 price represents the next bullish target.
If there is any pullback in the price of gold and the 200DMA resistance-turned-support gives way, a down toward the high of $1,787 from November 15 cannot be counted out. The downturn might then continue toward the $1,778 low from the previous day.
