On July 6th, last Friday's analysis suggested that disappointing US non-farm payroll data, indicating a substantive cooling in the labor market, had notably dampened market expectations for Federal Reserve rate hikes. The subsequent dollar decline to a one-week low provided support for a gold rebound. Technical analysis also pointed to potential for further short-term gains. Consequently, support levels were identified at $4,160 and $4,140, followed by $4,100, with resistance pegged at $4,200. A decisive break and hold above this level was seen potentially opening the path towards $4,300.
Subsequent price action saw gold trading sideways during the European session on Friday. Following the US market open, a brief dip to a low of $4,155 occurred before prices stabilized and rebounded, reclaiming the $4,160 support level. At the start of trading this Monday, gold fluctuated higher, reaching a daily peak of $4,202. The price tested the key $4,200 psychological level twice but failed to achieve a sustained breakout, quickly retreating to find a base near $4,136. It is currently trading around $4,150. Overall, gold stabilized near $4,160, rallied to encounter resistance at $4,200, retreated, and has temporarily steadied around $4,140, aligning broadly with the prior outlook.
Wolfinance star analysts note that after hitting a six-month low last week, gold staged a rebound to a one-week high. This was primarily driven by weaker-than-expected US ADP data, hinting the labor market might be less robust than perceived, a notion later corroborated by poor non-farm payroll figures showing job creation significantly missing forecasts and pointing to tangible labor market cooling. Additionally, comments from the Fed Chair were perceived as dovish, acknowledging receding inflation risks. These factors collectively reduced market bets on further Fed tightening, slightly lowering rate hike expectations, pressuring the dollar to a one-week low, and thereby supporting gold's recovery. The modest pullback at this week's open is attributed to ongoing declines in oil prices easing inflation pressures—diminishing gold's appeal as an inflation hedge—and a relatively firm US dollar applying downward pressure.
On the daily chart, gold's rebound from lows to a one-week high has met temporary resistance, leading to consolidative trading. Key support is now seen at the intraday low of $4,136, followed by the $4,100 level. A break below these could heighten short-term downside risks. Major resistance remains the $4,200 mark, which prices tested unsuccessfully multiple times on Friday and Monday. A sustained move above this level could target the $4,300 area. The 5-day moving average has formed a golden cross, and the MACD indicator shows a bullish crossover, though the KD indicator's golden cross has entered overbought territory and the RSI's bullish crossover is showing signs of turning down. Short-term technicals suggest gold retains potential for further gains, but the recent consecutive advances have introduced a need for corrective movement.
Intraday gold outlook: US employment data indicating a substantive cooling in the labor market has reduced market expectations for Fed rate hikes, providing a foundation for gold's recovery. A range-trading approach is advised. Support can be monitored at $4,136 and $4,100, with resistance focused at $4,200. A firm hold above this resistance could open the path towards $4,300.
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