gold price is continuing its decline from ten-month highs of $1,960.
gold(XAUUSD) price is holding steady above $1,900 as sellers take a breather following a sharp drop from ten-month highs of $1,960. So far, investors have remained on the sidelines as they examine the recent central banks’ policy actions and their market implications going forward. All eyes are now on the release of the United States Nonfarm Payrolls (NFP) report for new trading momentum in the gold price.
Weak US Nonfarm Payrolls might rekindle US Dollar selling and boost gold bulls.
Following two days of intense volatility, the gold price is treading water at lower levels, awaiting the next key US event, Nonfarm Payrolls, for further clarity on the US Federal Reserve’s (Fed) future policy course. The headline US Nonfarm Payrolls are expected to fall to 185K in January, down from 223K the previous month, while the unemployment rate is predicted to rise to 3.6%, up from 3.5% in December.
A weaker-than-expected US NFP result is likely to fuel dovish ‘Fed shift’ predictions, sparking a risk rally at the expense of the US Dollar. In such a case, the gold price could receive a much-needed boost, allowing it to resume its upward trend. Aside from the US labor market report, gold traders will be looking forward to the S&P Global and ISM Services PMI statistics from the United States.
Technical Analysis
Around the present, the gold price is defending the crucial short-term rising 21-Daily Moving Average (DMA) at $1,914, keeping purchasers optimistic.
Failure to defend the latter will result in a new plunge into the $1,900 level. A sustained move below the latter will raise the floor in the direction of the bullish 50DMA at $1,847.
The 14-day Relative Strength Index (RSI) is rising over the midpoint, indicating that the gold price is on the verge of a moderate comeback.
To extend the rally toward the $1,934-$1,935 supply zone, gold must reclaim the $1,920 round figure.
If the recovery gains traction, the multi-month highs of $1,960 will reappear on the radars of gold bulls.
