Gold is trading at a flat line in early Good Friday trade, as bulls defend the $2,000 level ahead of the all-important US Nonfarm Payrolls report. The US Dollar (USD) is clinging to recovery gains despite a brief increase in US Treasury bond rates.
As market sentiment remains marginally upbeat ahead of Easter celebrations. The future direction of the gold price is still dependent on the US labor market report. Which is the final employment data for the Federal Reserve to review ahead of the May 2 and 3 monetary policy meeting. Economists anticipate that the US economy will add 240K jobs in March, up from 311K in February. The March Unemployment Rate is most likely to be to remain stable at 3.6%. While Average Hourly Earnings are expected to fall further to 4.3% in the reported month, down from 4.6% the previous month.
The US dollar is on the mend as US Treasury bond rates rise ahead of US Nonfarm Payrolls data.
The Nonfarm Payrolls report, along with weakening wage inflation in the United States. Would create a great case for the Fed to suspend rate hikes in May. Prompting a fresh sell-off in the US Dollar and US Treasury bond rates while driving gold prices back towards the yearly high of $2,032. If the Nonfarm Payrolls data surprises to the upside, betting on a 25-basis point (bps) Fed rate hike will increase, restarting the gold price fall below $2,000.
Irrespective of the outcome of the US labor market report, volatility spikes are anticipated to arise within tight liquidity. As important Global stock markets are closed in honor of Good Friday. Furthermore, investors may reposition themselves ahead of next week’s important United States Consumer Price Index (CPI) data release.
Gold Technical Analysis
Technically, little appears to have changed for the gold price. With the $2,000 level still providing firm support. The next level of support is expected at the pennant resistance-turned-support level of $1,986 below. Which the confluence of Tuesday’s low and the pennant support level of $1,975 will be challenged.
Furthermore The 14-day Relative Strength Index (RSI) is comfortably above the midpoint which keeps gold purchasers optimistic.
On the other hand If gold bulls regain control, immediate resistance is predicted around $2,020, over which the yearly high at $2,032 would enter the picture.
Weak US Nonfarm Payrolls might spark a new rise towards the pennant goal of $2,043 if acceptance exceeds the latter.
