E Gold Bulls Resilient Ahead Of Non-Farm Payrolls

The gold price on Tuesday continued to experience strong resistance around the $1,770 level in an ascending channel. The price of the yellow metal has been on a bull-run since bottoming at around $1,680 in the second week of June. It remains slightly above the 100-hour and the 200-hour SMA lines in the 60-min chart. 

Gold is also trading closer to the overbought levels of the 14-hour RSI which explains the fading of the upward momentum over the last week. The yellow metal has benefited from the adverse effects of the coronavirus pandemic amid strained economic activity.

Gold price fundamentals overview

From a fundamental perspective, gold continues to experience an influx of investors amid rising concerns on global economic growth. In a recent report, the IMF expects the global economy to contract by about 5% this year while the US economy is expected to fall 8%. The market also expects the US unemployment rate to stabilize in the higher single-digits down from the May level of 13.3%. All eyes will be on Thursday’s non-farm payrolls with a predicted unemployment rate of 12.3% for June and about 3 million new jobs.

Earlier in the week, Germany’s harmonized index of consumer prices for June beat the (YoY) expectation of 0.6% with a change of 0.8%. The UK GDP for Q1 missed the (QoQ) expectation of -2% with a -2.2% change while the preliminary EU CPI for June outperformed the (YoY) expectation of 0.1% with a change of 0.3%. 

And on Wednesday morning, the German China’s Caixin Manufacturing PMI for June beat the expected rating of 50.5 with a slightly better rating of 51.2. The seasonally adjusted German unemployment rate slightly edged higher to 6.4% up from 6.3% but beat the expected level of 6.6%.

Gold price short-term technical analysis

From the perspective of price action trading, the bulls will be optimistic ahead of the US non-farm payrolls. The price of the yellow metal continues to oscillate within an ascending channel in the 60-min chart. This indicates a short-term bullish bias in the market sentiment. However, the bulls also appear to be struggling to rally the gold price past the $1,770 key level amid a strong resistance. This could trigger a short-term pullback.

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Disclosure: The material appearing on this article is based on data and information from sources I believe to be accurate and reliable. However, the material is not guaranteed as to accuracy nor does ...

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William K. 6 months ago Member's comment

The simple explanation is that gold is rising because confidence is falling. We are seeing way to many wrong decisions by those who should be making much better choices.