- Gold bulls have eyes on a 61.8% Fibo monthly target of $1,850.
- Shorter-term, the bears can target at least a drift to a 38.2% Fibo at 1.807 or the daily support, near $1,800.
- Will NFP be the catalyst to test the commitments at $1,820/25 on a soft US dollar?
Update: Gold finally broke out of its intraday consolidative trading range and surged to near three-month tops, around the $1,838 region during the early North American session. The US dollar witnessed some aggressive selling in reaction to the disappointing US NFP report, which showed that the economy added only 266K jobs in April as against consensus estimates pointing to a reading of 978K. Adding to this, the previous month’s reading was also revised down to 770K from 916K reported previously. This was accompanied by an unexpected rise in the unemployment rate to 6.1% from 6.0% in March.
The data reaffirmed market expectations that the Fed will keep interest rates near zero levels for a longer period. This was further reinforced by a sharp fall in the US Treasury bond yields, which was seen as another factor that provided a strong lift to the non-yielding XAU/USD. Bulls seemed rather unaffected by the underlying bullish sentiment in the financial markets, which tends to drive flows away from traditional safe-haven assets, including gold.
Update: Gold (XAU/USD) is holding the higher ground, closing in on the three-month highs of $1822 reached earlier in the Asian session. The price of gold is up nearly 3% this week, on track to register the best week in six months. The bearish undertone in the US dollar and Treasury yields, especially after the latest dovish comments from the Fed policymakers, continue to offer support to gold.
Investors eagerly await the US NFP report for the next direction in gold prices. Only an NFP blowout could stem the upsurge in gold, as it would rei-ignite the Fed’s tapering expectations. The headline payrolls are seen rising by 978K in April vs. 916K recorded in March.
Read: Gold Price Forecast: XAU/USD eyes $1840, overbought conditions, NFP could play spoilsports
Update: Gold (XAU/USD) bulls catch a breather around $1,820, up 0.24% intraday, after printing the fresh high since mid-February ahead of Friday’s European session open. Gold buyers earlier cheered the hopes of extended monetary policy, as suggested by the Fed policymakers, as well as the faster coronavirus (COVID-19) vaccinations due to the latest drive to waive vaccine patents. However, the risk-on mood fades as traders from Brussels turn cautious ahead of the key US Nonfarm Payrolls data.
Gold recently takes clues from the market optimism and hence a pullback in stock futures as well as the US 10-year Treasury yields, seem to have weighed on the prices. Even so, gold buyers remain hopeful as the US employment report for April is likely to print strong job numbers.
Update: Gold (XAU/USD) is consolidating near three-month highs of $1818 so far this Friday, having witnessed a…
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