Gold Bounces Back amid US Nonfarm Payrolls News

Gold inched higher on Monday, increasing the price of yellow metal to more than $1250.00 an ounce after some key economic releases. The technical bias remains bearish because of a lower low in the recent downside move.

XAU/USD Technical Analysis

As of this writing, the precious metal is being traded near $1250.82 an ounce. A hurdle can be noted near $1300, a key psychological level ahead of $1357, the high of the last major upside rally on the daily chart and then $1400, the psychological level. A break and daily closing above the $1400 level shall trigger renewed buying interest, validating a rally towards the $1440 resistance zone.

On the downside, a support may be noted around $1239, an immediate horizontal support ahead of $1225, the psychological level as well as another key horizontal support area and then $1200, a major psychological number. The technical bias shall remain bullish as long as the $1200 support area is intact.

US Nonfarm Payrolls

The U.S monthly employment report showed that the economy created more jobs than forecast in November, the unemployment rate remained unchanged and wage inflation rose less than expected, according to official data released on Friday.

Non-farm payrolls increased by 228,000 in November, following a 244,000 a month earlier that was revised down from the initial increase of 261,000. The data exceeded the consensus estimate for the creation of 200,000 jobs.

The jobless rate held at 4.1% last month, in line with expectations.

Trade Idea

Considering the overall technical and fundamental outlook, buying the precious metal around current levels appears to be a good strategy in short to medium term.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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