Gold Opens With Large Gap As Bulls Muscle Up

Gold opened with a large gap, increasing the price of the yellow metal to more than $1300.00 an ounce following some key economic releases. The technical bias remains bearish because of a lower low in the ongoing downside move.

XAU/USD Technical Analysis

As of this writing, the precious metal is being traded near $1333 an ounce. On the upside, a hurdle can be noted near $1374, the high of the last major upside rally on monthly chat ahead of $1400, the psychological level as demonstrated with red color in the given below chart. 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 $1305, an immediate horizontal support ahead of $1300, a key horizontal support as well as psychological number and then $1280, another major horizontal support area. The technical bias shall remain bullish as long as the $1200 support area is intact.

US Nonfarm Payrolls

The U.S. economy created 156,000 jobs in August while the unemployment rate edged higher to 4.4 percent, according to a closely watched government report Friday.

Economists surveyed by Reuters had been expecting payrolls to grow by 180,000 in August and the unemployment rate to hold steady at 4.3 percent. A broader measure that includes discouraged workers and those holding part-time jobs for economic reasons also was unchanged at 8.6 percent.

Despite the miss on the headline number, markets reacted little to the news as stocks appeared headed for a higher open and government bond yields and the U.S. dollar edged lower.

Trade Idea

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

 

usmanahmed7290@gmail.com'

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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