Gold prices continue to face pressure near highs and have been fluctuating in a wider range between $1,750 and $1,770 over the past three sessions. Many factors are contributing to the precious metal’s downside, including a stronger dollar, higher US Treasury bond yields and stock gains, according to market analyst Christian Borjon Valencia. Meanwhile, the US Dollar Index (DXY) remains strong near 94.00 with new gains of 0.22%, with US 10-year Treasury yields continuing as investors’ concerns over sustained high inflation and the Fed’s early tapering expectations in November It rose to 1.55%. The analyst states that high equity markets are also driving traders away from bullion.
From Wednesday to Friday, US employment data is at the forefront
cryptocoin.com As we reported, gold prices started to decline again after three days. At the time of writing, the precious metal was trading at $1,748.66, down 0.62% daily. The market sentiment remains upbeat for now, as evidenced by US stock indexes that cut Monday’s losses and ranged between 0.55% and 1.44%.
The US economic report will include critical macroeconomic data to help traders gauge the next yellow metal move. On Wednesday, September ADP Employment Change data will be released. The market expects 428K new job growth versus 374K in August. On Thursday, US Initial Unemployment Claims for the week ending October 1 are expected to be 350,000. On Friday, the U.S. Bureau of Labor Statistics will release its report on Nonfarm Payrolls. The market expects 488,000 new jobs to be created in the US economy.
Federal Reserve Chairman Jerome Powell said a good employment report would convince him of the tapering process. If the outcome is what President Jerome Powell expected, the tapering announcement could be made at the FOMC’s November meeting.
Gold price technical view
Market analyst Christian Borjon Valencia notes that the spot gold price remains well below the daily moving averages (DMAs), indicating a downward trend, and says that the daily close in Monday’s price action could create a bearish-haram pattern, although it requires confirmation. Christian Borjon Valencia continues his analysis as follows:
The golden bears will need a break below the October 5 low of $1,747 if they want to continue the downtrend. In the case of this outcome, there is a move towards $1,687 on the cards. However, there will be some obstacles on the way. Initial support will be at $1,721 September 29 low, then $1,700.
On the other hand, if the golden bulls want to regain control, they will need a daily close above the 50-day moving average (DMA) at $1,782, noting the following levels:
Once this is accomplished, the key resistance levels below will be the 200-DMA at $1,800 and the 100-DMA at $1,808. The Relative Strength Index (RSI) is at 46, slightly lower, supporting the bearish bias, so another drop could be in order.
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