Gold Bulls Remain Resilient Ahead of US Non-Farm Payrolls

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The gold price on Thursday pulled off its recovery curve to trade at $1,706 down from session highs of about $1,720 following Wednesday’s rebound. The yellow metal continues to trade within a slightly ascending channel in the 60-min chart. This indicates a relative bullish bias in the market sentiment ahead of the US non-farm payrolls on Friday.

The price of gold has now surged closer to overbought levels of the 14-hour RSI. However, it remains a few pips below the 100-hour and the 200-hour SMA lines. This could result in a consolidative pattern formation before the next major breakout.

Gold Price Fundamentals Overview

From a fundamental perspective, the gold price continues to enjoy a weakening bullish bias amid a lack of strong directional momentum. This is down to a seemingly positive outlook of the US economy. Despite the protests and the adverse effects of COVID-19, investors are increasingly beginning to bet more on hope and less on risk. This has reduced investment activity in safe-haven assets, which include gold. As such, the upward trend appears to be flattening.

On Monday, the US ISM-Manufacturing PMI missed the expectation of 43.6 with 43.1. The ISM Manufacturing Employment Index also came short of 35 with 32.1. On the other hand, the ISM non-Manufacturing PMI beat 44 with 45.4 while the ADP Employment change outperformed the estimate of -9M with -2.76M. However, the ISM non-Manufacturing Employment Index came short of 35.8 with 31.8. And on Thursday, initial jobless claims for the week ending May 29 missed 1.8M claims with 1.877M claims.

Gold Price Technical Analysis (the 60-min Chart)

Technically, the price of gold appears to be trading within a gently ascending channel in the 60-min chart. This indicates a relatively short-term bullish bias in the market sentiment. The price of the yellow metal also appears to be heading towards overbought levels of the 14-hour RSI.

The bulls will be targeting short-term profits at around $1,742 or higher at $1,764. On the other hand, the bears will look to capitalize on all pullbacks at around $1,683 or lower at $1,662.

Gold Price Technical Analysis (the Daily Chart)

In the daily chart, the gold price appears to be trading within a sharply rising channel. This indicates a strong long-term bullish bias in the market sentiment. Gold has recently turned downwards and appears to be heading towards the center of the 14-day RSI.

The bears will look to pounce on long-term profits at around $1,645 or lower at $1,581. On the other hand, the bulls will look to extend the current long-term gains towards $1,768 or higher at $1,823.

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