XAU/USD aims to extend recovery above $1,720 as focus shifts to US Non-Farm Payrolls
After detecting demand near the crucial support level of $1700 per ounce, the price of gold (XAU/USD) has started to move sideways. The goal for the precious metal is to clear the $1729 per ounce, after which it will encounter its next roadblock at about $1737. While the market mood is shifting negatively due to the rise in tensions between Japan and North Korea, the yellow metal is hanging onto its gains.
The DXY had a strong retreat on Wednesday after lagging to almost 110.00. Positive US ISM Services PMI data and Automatic Data Processing (ADP) Employment Change numbers gave the DXY bulls a push. The Non-Manufacturing PMI came in at 56.7, exceeding the predicted value of 56.0. In addition, payrolls have gone from 200k to 208k, exceeding forecasts, Fx Street reported.
The US Nonfarm Payrolls (NFP) numbers are expected to remain positive, according to hints from US ADP Employment data. In line with estimates, the US economy has created 250k new employment since the previous forecast of 315k. At 3.7%, the unemployment rate is still the same. Aside from them, the data on average hourly earnings will command attention. It is anticipated that the labor cost index will decrease to 5.1%, 10 basis points below the previous release.
Technically, the December gold futures price had a typical corrective retreat. Tuesday saw a three-week peak in prices. The near-term technical balance is still in favor of the bears on gold futures. However, it appears that the market has reached its short-term low. The next price goal for the bulls is to close above the strong resistance level of $1778. The next short-term price target for the bears is to drive futures prices below strong technical resistance at this week’s low of $1666.
By the way, gold is a downtrend in the technical daily chart, playing between $1686 to $1729. First resistance is seen at this week’s high of $1738 and then at the September high of $1746. First support is seen at today’s low of $1708 and then at $1700. Investors who want to buy gold should waiting buy at $1700 and set a stop-loss function in order to protect their capital.