Article by: ETO Markets
Gold's price action this week has been primarily driven by deteriorating labor market conditions and heightened trade tensions, propelling prices to a fresh all-time high of $.... The significant miss in Tuesday's JOLTS job openings, which fell to 7.60M against an expected 8.01M, has reinforced market expectations for Fed rate cuts, despite a surprise improvement in ISM Manufacturing PMI to 50.9. The market now faces critical tests with today's ISM Services PMI (forecast 54.2) and ADP Non-Farm Employment Change (forecast 148K), while President Trump's scheduled speech adds another layer of volatility given recent trade developments. The combination of weakening employment metrics and escalating US-China trade tensions, following China's retaliatory tariffs on US imports, has created a potent environment for gold's safe-haven appeal, with traders maintaining bullish positioning despite technically ... conditions.
From a technical perspective, gold prices have executed a decisive breakout above the ascending channel's upper boundary (around $...), marking a significant technical development that suggests increased bullish momentum. The breakout occurred with strong follow-through buying, pushing prices to new all-time highs near $.... The prior channel's upper boundary should now act as support, with additional support at the previous channel median line around $.... The momentum of this breakout, combined with the strong uptrend evidenced by the rising 50-day moving average (light blue line), indicates potential for further upside. However, the steep vertical nature of the recent advance and the considerable distance now established above the moving average suggests the rally may be overextended in the near term. This could lead to either a period of consolidation or a retest of the broken channel resistance-turned-support. The absence of historical resistance levels, due to trading at all-time highs, leaves psychological levels ($..., $...) as the primary upside reference points.
