Gold price remains range-bound as the market remain fixated on Friday’s nonfarm job data. Investors will likely refrain from big bets ahead of the highly anticipated data.
NFP jobs data
In the ensuing sessions, the market will remain fixated on the nonfarm jobs data scheduled for release on Friday. Notably, employment numbers remain a key determinant of the Fed’s monetary policy. In recent meetings, Jerome Powell has insisted that the central bank will maintain its accommodative monetary policy until further progress is made in employment.
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In the Jackson Hole symposium held last week, the Fed Chair held a cautious stance. While he hinted that tapering will likely commence before the year’s end, he was quick to add that that shouldn’t be viewed as a precursor for rate hikes.
The Fed’ dovish tone in the previous week boosted gold price above the resistance-turn-support level of $1,800. From this perspective, Friday’s data will likely rekindle inflation talks. Lower-than-expected job numbers will weigh on the dollar while acting as a bullish catalyst for precious metals.
In the immediate term, the market will be reacting to the ADP nonfarm employment numbers. Analysts expect 613,000 additional people to have been employed in non-farm private entities in August compared to the prior month’s 330,000.
Gold price technical outlook
Since Friday, gold price has been trading within a tight range as it remains buoyed above the crucial level of 1,800. During this timeframe, it has largely been trading between 1,819.70 and 1,807.42. On Monday, the bulls failed in their attempt to reach the prior resistance level of 1,825. On Tuesday, the precious metal held above the support level of 1,800 by a whisker.
At the time of writing, gold price was down by 0.1% at 1,812.05. On a two-hour chart, it is trading slightly above the 25 and 50-day exponential moving averages. In the immediate term, the precious metal will likely continue to find support along the 25-day EMA at 1,811.65. Subsequently, it will probably remain within a tight range as investors stay fixated on the nonfarm jobs data. From that perspective, it may find resistance at Tuesday’s high of 1,819.70.
Heightened bullish momentum may push the price further to 1,825. On the flip side, a move below its current support level will likely place it along the 50-day EMA at 1,807.42. Overall, I expect the precious metal to remain steady above 1,800 in the short term.
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