Gold is currently trading just below the key level of $2,500 as risk recedes and the US Dollar makes a marginal recovery. Traders are eagerly awaiting the US labor market data this week to make their next moves in the market.
The $2,500 level is crucial from a technical perspective, and there is bearish pressure threatening to break it. The market sentiment is currently calm, which is not driving up demand for safe-haven assets like Gold.
Investors are patiently waiting for the US labor market data to assess the state of the economy and predict the Federal Reserve’s decision on interest rates. Any weaker-than-expected data could lead to a fall in the US Dollar but a rise in the price of Gold.
Technical analysis shows that Gold is testing the base of a mini-range between $2,500 and $2,531. If it breaks lower, it could enter a new zone of activity between $2,470 and $2,500. However, the long-term trend for Gold remains bullish, with an upside target of $2,550 if it breaks above the previous high of $2,531.
Gold traders await US labor market data
Gold prices are likely to see volatility this week with the release of US labor market data. If the data comes out weaker than expected, it could lead to a fall in the US Dollar and a rise in the price of Gold. The market is speculating on whether the Fed will make a 25 bps or 50 bps cut to interest rates in September.
Technical Analysis: Breakout or Breakdown?
Gold is currently testing a key support level and could potentially break lower into a new trading zone. However, the overall trend for Gold remains bullish, with an upside target of $2,550 if it breaks above the previous high of $2,531.
Economic Indicator: ISM Manufacturing Employment Index
The ISM Manufacturing Employment Index is a significant indicator of the overall economic condition in the US. A high reading is positive for the USD, while a low reading is negative. Traders will be closely watching this indicator for clues about the state of the US labor market.