Gold price has continued to face resistance at $1,990 even as the uptrend persists. The market awaits further cues on the health of the US economy and the direction of the Fed’s monetary policy from the scheduled jobs data. Signs that the US labor market is slowing may give the bulls an opportunity to retest the crucial zone of $2,000.
As the week unfolds, gold price will be reacting to the scheduled US economic data. The figures are set to give further cues on the direction of the Fed’s monetary policy and overall health of the largest economy.
On Monday, the US manufacturing PMI showed that the country’s manufacturing sector contracted for the fifth consecutive month. A figure below 50 usually represents a contraction. In reaction to the figures, the dollar index erased Friday’s gains to trade a level last recorded over a week ago at $102.03. Granted, it traded in the green on early Tuesday.
Even so, the weakening of the US dollar continues to boost gold price. On the one hand, the stabilization of the banking crisis has eased the demand for safe havens. This explains why the bullish momentum hasn’t been enough to retest the crucial zone of $2,000.
In the ensuing sessions, traders will be looking for cues on whether gold price is set for further rallying in the short term. February’s JOLTs job openings data are set for release later on Tuesday while March’s nonfarm payrolls are scheduled for Friday.
Gold price technical analysis
While gold price remains on the rebound that has persisted for about four weeks now, it has been facing resistance at 1,990 in recent sessions. A look at its daily chart shows that it continues to trade above the 25 and 50-day EMAs; a sign that the bulls are still in control.
Ahead of the jobs data later on Tuesday, the aforementioned resistance level will be worth watching. Signs that the US labor market is slowng will likely be embraced as a sign that the Fed will further ease on its monetary policy in coming months. If that happens, the bulls may have an opportunity to boost gold price towards the next target at 2,009.63.
On the flip side, if the narrative of a strong US labor market and high inflation persists, the bulls will be striving to defend the support at 1,950.93. Further rebounding of the US dollar may push the precious metal lower to 1,932.64.