The price of gold has reached a monthly high and is currently trading just below the $1,800 level. This comes as bulls take a breather following the recent increase in price and in anticipation of the all-important US Nonfarm Payrolls report. The markets witnessed a temporary safe haven bid in the US dollar in the midst of mounting recession risks, particularly after the Bank of England (BOE) projected one later this year. However, dismal weekly Jobless Claims data dragged the USD lower, causing the recession risks to have a negative impact. The United States Department of Labour reported that the number of people filing initial claims for state unemployment rose by 6,000 to a total of 260,000 in the week that ended on July 30. This number is hanging close to an eight-month high. The financial markets are anticipating that if the figures continue to grow, it may be an indication that the largest economy in the world is about to enter a period of recession. The demand for safe havens shot through the roof, and investors rushed to buy gold as a classic safe haven investment.
In the middle of worries about economic expansion and positive corporate earnings reports, the value of the United States Dollar (USD) continued to weaken, which helped the price of gold to gain strength. The focus has now shifted to the data on the labour market in the United States, where it is anticipated that the economy created a measly 250,000 jobs in July, compared to the previous month’s gain of 372,000 jobs. Any sign of weakness in the US employment sector is likely to revive lower expectations of further Fed tightening, which will lead to a decline in the value of the dollar. As a result, the bullish trend that has been seen in stocks and the price of the precious metal measured in USD could continue.
On Thursday, the price of gold managed to finish the trading day at $1,790, which was higher than the crucial downward-sloping 50-day moving average.
The way is now clear for a second rise to the figure of $1,800, which, if achieved, will bring into play the horizontal trendline resistance connecting the high reached on July 5 at $1,812 in the price action. This means there will be less of a barrier for gold to overcome on its way to the next Resistance Levels at $1,808.
Stochastic Indicator for a period of 5 days showing a stronger Gold to rise to chase the overbought levels, which means that the possibility of it going up is quite high but is still limited to the Resistance Levels. Stochastic Indicator for a period of 5 days showing a stronger Gold to rise to chase the overbought levels.
Gold’s daily support levels are at $1,752, $1,734, and $1,697, while its daily resistance levels are at $1,808 and $1,828, respectively.
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