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.
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.