On Friday trade, gold is holding the earlier bounce at the $1,830 mark. Gold bulls are taking a respite as they prepare for the publication of the all-important US Nonfarm Payrolls (NFP) data.
All eyes are on the nonfarm payrolls in the United States (NFP).
Analysts predict that the US economy will add 205K jobs in February. Up from the stunning 517K job increases reported in January. In February, average hourly earnings increased by 4.7% year on year, compared to 4.4% the prior month. In the reporting month, the US unemployment rate is expected to remain at 3.4%.
Another upward surprise in the headline Nonfarm Payrolls report cannot be ruled out as the United States. ADP Employment Change data came in at 242K vs. 200K projected and 119K before. Moreover, the reality that the job market in the United States remains tight cannot be overlooked.
If the US NFP exceeds forecasts, the US Dollar may receive a much-needed lift in order to restart its rise versus its main competitors, putting the gold market back in the hands of bearish. Wage growth will also be a focus, especially with the US Consumer Price Index (CPI) running hot and raising expectations of aggressive Federal Reserve tightening.
Gold Technical Analysis
Gold is still languishing towards the latter, seeking a sustained rise above the 21 DMA level.
With the 14-day Relative Strength Index (RSI) remaining below the midline. Gold price risks remain tilted to the negative.
As a result, solid nonfarm payrolls in the United States might boost bearish wagers on gold. Driving rates back towards the important 100 DMA support around $1,810.
Prior to that, the March 8 high of $1,824 may provide some relief to gold purchasers. A persistent breach below the bullish 100 DMA threshold may trigger a new downtrend towards the flattish 200 DMA around $1,775.
On the other hand, the gold price is anticipated to firmly reclaim the 21 DMA barrier following a poor US job market data. might act as a deterrent to larger Fed rate rises.
Farther higher, the gold price might test the psychological level of $1,850, with an eye on the weekly high of $1,858.
