Article by: ETO Markets
Investors in gold are being cautious because of the possibility of a correction following the recent rally and another increase in the US NFP headline number. It is anticipated that the US economy added 200K jobs in January, compared to an unexpected growth of 353K jobs in January. In the reported period, average hourly earnings are expected to increase at an annual pace of 4.4%, which is a decrease from the 4.5% recorded previously. A disappointing US labour market report could confirm growing forecasts of a US Federal Reserve interest rate decrease in June, which would strengthen the pain in the US dollar and push the price of gold to a new lifetime high.
The price of gold might hit the first support level around $…, the day's low, if gold sellers step in. The next level of support is observed around $…, which is the 23.6% Fibonacci Retracement level. A prolonged pause below that level would encourage gold sellers to tighten their grip in the direction of the $… barrier.
The 20- and the 50-DMA bull cross are still in action, therefore any decline in the price of gold could be viewed as a favourable opportunity to purchase a dip. Conversely, in order to maintain the upward trend, gold purchasers must cross the $… barrier. The resistance at $… and the record high at $… will be tested before that.
