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- Gold price is making another to recapture the $2,050 psychological barrier.
- Fed rate cut bets keep weighing on the US Dollar and US Treasury bond yields ahead of jobs data.
- Gold price’s daily technical setup continues to favor buyers, with eyes again on $2,100
Gold price is attempting a bounce toward $2,050 early Tuesday, following a massive $120 pullback from fresh record highs of $2,144 set in Monday’s Asian trading. Gold price is finding support from a renewed weakness in the US Dollar alongside the US Treasury bond yields, as the focus shifts toward the high-impact US JOLTS Job Openings data and ISM Services PMI due later on Tuesday.
Gold price retains the bullish potential
Monday’s sharp retracement in Gold price came as no surprise after the relentless upsurge. Investors resorted to recaliberating the US Federal Reserve (Fed) rate cut expectations, as well as, some profit-taking heading into a slew of critical US employment data, starting from Tuesday.
US Job Openings data, due at 1530 GMT, is forecast to show 9.35M, having shown signs of a slowdown in the job market in September. Further slack in the US employment sector is likely to affirm the March Fed rate cut expectations, accelerating the decline in the US Dollar and the US Treasury bond yields. Markets continue pricing about 60% chance of the Fed cutting interest rates in March.
In the meantime, markets look forward to the Reserve Bank of Australia’s (RBA) policy announcement, with the central bank expected to hold the interest rate at 4.35% in the December meeting. A dovish tone in the RBA’s communication on the path forward is likely to remain supportive of the Gold price.
Gold traders also cheer strong China’s Caixin General Services PMI reading, which came in at 51.5 in November as against a 50.8 print expected and the previous figure of 50.4. Improving business momentum in China, the world’s top Gold consumer, is likely to bode well for Gold price.
Meanwhile, Gold price will also pay close attention to the Middle East geopolitical developments for fresh trading incentives.
Gold price technical analysis: Daily chart
As observed on the daily chart, Gold price keeps its bullish bias intact, as the 14-day Relative Strength Index (RSI) indicator has retraced from within the overbought territory to hold above the midline. This suggests that there is a scope for a fresh upswing in Gold price.
The Golden Cross, as represented by the 50-day Simple Moving Average (SMA) and the 200-day SMA bullish crossover, also adds credence for further upside.
A daily closing above the $2,100 level is needed to initiate a sustained uptrend toward the all-time high of $2,144. Ahead of that, Gold buyers need to find acceptance above the $2,050 psychological barrier.
On the other side, if the corrective decline resumes, The next strong support is seen at the $2,000 threshold, below which the 21-day SMA at $1,994 could come to the rescue of Gold buyers.
Further down, the $1,990 round figure will be challenged.
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