Gold Price Analysis: Weekly Outlook
- Gold price set for third weekly gain: Despite consolidating near two-week lows, gold is on track to secure its third consecutive weekly gain.
- US Dollar awaits Nonfarm Payrolls data: The US Dollar is pausing its recovery mode ahead of the key US Nonfarm Payrolls report.
- Technical Perspective: The 21-day Simple Moving Average (SMA) acts as a crucial support level amid bullish daily Relative Strength Index (RSI) after a recent rising channel breakdown.
Gold price is facing weekly losses but remains resilient as traders eagerly await the high-impact US Nonfarm Payrolls (NFP) data, which could provide a fresh directional impetus for the precious metal.
Gold Price and US NFP Report
Gold price is currently off the two-week lows, with traders exercising caution ahead of the US labor market report. The recent strength in the US Dollar, driven by easing trade tensions and positive economic sentiments, has weighed on the gold price.
Market sentiment received a boost following reports of potential talks between the US and China, leading to a pause in the Dollar’s recent uptrend. Meanwhile, geopolitical tensions between Russia and Ukraine are providing some support to gold.
Attention is now focused on the US NFP data release, where expectations are for a job gain of 130,000 in April, down from the previous month’s figure of 228,000. Any reading below 100,000 could raise concerns about the impact of tariffs on the US labor market, potentially leading to a decline in the Dollar and a rise in gold prices.
Gold Price Technical Analysis
From a technical perspective, gold price is hovering around the critical 21-day SMA support level at $3,234, following a breakdown of a rising channel. The RSI indicator is showing signs of stabilization, indicating a potential rebound if the SMA holds.
If the gold price manages to break above the immediate resistance at $3,260, it could target the channel support turned resistance at $3,405. On the downside, a sustained break below the 21-day SMA could open the doors towards the psychological level of $3,150.
Economic Indicator: Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses. It is a key economic indicator released by the US Bureau of Labor Statistics (BLS) and can trigger volatility in the Forex market. A high reading is seen as bullish for the US Dollar, while a low reading is bearish. The market’s reaction depends on how the data is interpreted in conjunction with other factors.