Gold Price News: Gold Eyes US Employment Data
Currently trading at $2519/toz, gold has enjoyed a modest bounce amidst febrile investor risk appetite, a continued easing of rates markets and further weakening of the US dollar. Initial indications are that net flows into physical ETFs/ETCs have held up well thus far this week. However, these flows can be highly volatile and are only loosely correlated to futures positioning, the latter of which will be updated after today’s European close.
All eyes now turn towards the slew of US August employment data released later today. This is arguably the single most significant data point ahead of the Fed’s rate decision 18 September. After the market havoc wreaked by the previous month’s weak print and historic revisions, expectations are for a 160k rise in Non-Farm Payrolls for August.
Gold’s most recent price action has seen it move back above the 23.61% Fibonacci retracement of the 25 July- 20 August uptrend at $2490/toz, ascending oblique major support at $2493/toz and a steeply ascending 20-day Simple Moving Average at $2494/toz. An immediate breakdown seems to have been avoided.
However, while gold now appears to have breached weak descending oblique resistance at $2517/toz, some caution should be exercised. Momentum indicators remain weak, and we need to see a sustained move above major horizontal resistance at $2520/toz before we can be confident of a positive resolution to a broader consolidation. Should that occur, there is weak ascending oblique resistance at $2538/toz and an initial breakout target of $2543/toz.
If the current tentative proximate support from Fibonacci, oblique support and moving averages be decisively compromised at $2493/toz, then the next major support levels present as the converging ascending lower bound of a 26 June/17 July/26 July channel and the rising 50-day Simple Moving average, both currently around $2439/toz.
Significant events for gold investors going forward include US August Employment data and speeches from Fed Board Member Waller and New York Fed President Williams – both FOMC voters and centrists – all on 6 September.
Mike Ingram
Tim Moseley