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- Gold price is extending its range-play near $2,030 early Friday.
- US Dollar is licking its wounds, as US Treasury bond yields cling to recovery gains.
- Gold price looks north on a weak US Nonfarm Payrolls report, as the daily chart leans bullish.
Gold price is extending its range-play into the fourth straight trading day early Friday, as investors prefer to stay on the sidelines before the release of the all-important Nonfarm Payrolls data later in the day.
US Nonfarm Payrolls could offer a fresh boost to Gold price
Gold price is treading water, lacking any impetus, as traders refrain from placing any fresh directional bets on the United States Dollar (USD) in the lead-up to the critical US jobs data. The US Dollar is licking its wounds after falling hard in tandem with the USD/JPY pair. The Japanese Yen rallied over 500 pips against the US Dollar on Thursday, smashing USD/JPY to a new four-month low of 141.63 on hopes of a Bank of Japan’s (BoJ) policy pivot earlier than expected.
Despite the US Dollar sell-off, Gold price failed to benefit, as the US Treasury bond yields rebounded firmly from multi-month lows, diminishing the appeal of the non-interest-bearing Gold price. Markets resort to repositioning in the US government bonds and the US Dollar, as they seek to lock in profits heading toward next week’s Federal Reserve (Fed) interest rate decision.
In the meantime, the highly anticipated US labor market data will be closely scrutinized for fresh hints on the Fed’s interest rate outlook, with markets pricing roughly 60% odds of a rate cut in March. The NFP data is expected to show that the US economy added 180K jobs in November, as against the previous job growth of 150K while wage inflation, as measured by Average Hourly Earnings, is seen rising 4.0% YoY in November.
The latest US ADP and JOLTS Job Openings data pointed to loosening labor market conditions. If a weak US NFP print confirms that, the Fed rate cuts are likely to shoot up, smashing the US Dollar alongside the US Treasury bond yields. In such a case, Gold price is likely to reclaim the $2,050 barrier on a sustained basis. Contrarily, should the data outpace expectations, markets could use that as an excuse for profit-taking ahead of the Fed verdict. The Gold price correction could then resume toward the $2,000 mark.
Gold price technical analysis: Daily chart
As observed on the daily chart, Gold price has been making higher lows following Monday’s volatile trading, suggesting that there is more scope for a fresh upside.
The 14-day Relative Strength Index (RSI) indicator edges higher above the midline, backing the bullish potential in Gold price.
Gold buyers need to find acceptance above the $2,050 region to unleash additional advances toward the $2,100 threshold.
Fresh buying opportunities will pop up above the latter, targeting the all-time highs of $2,144.
On the other hand, the immediate support is seen at Tuesday’s low of $2,009, below which the $2,000 threshold will be a critical test for bullish traders. At that level, the 21-day Simple Moving Average (SMA) aligns.
The next downside cushion is then seen at the $1,980 round figure.
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