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Friday's Employment Data Will Be Critical For Gold

Commentaries & Views

Friday’s Employment Data Will Be Critical For Gold

Yesterday’s close: Settled at 1437.8, down 4.0

Fundamentals: Gold settled before the Fed released their policy decision yesterday as it does on each FOMC Meeting. The metal is down sharply from settlement and trading below 1420 this morning. As we noted here Monday, Gold faces a gauntlet of news this week from start to finish and given the heightened expectations for future cuts, merely finishing the week unchanged was a win for the bulls. Yesterday, Fed Chair Powell was less dovish as we feared and said the “cut was a mid-cycle adjustment”. The odds of a follow up cut in September have sunk to 51.9% from 75% and the Dollar Index has broken out to new highs on the year. The week is not over though, and ISM Manufacturing is due at 9:00 am CT today and Nonfarm Payroll we be absolutely crucial tomorrow.

Technicals: Price action is handedly below the 1423.9 support level and this will act as our pivot today; a close above here, at this point is constructive. Lucky for the bulls, there are two strong waves of major three-star support below the market. The first comes in at 1410-1414.6 and again below there at 1400.5-1403.5. Gold is still in a strong long-term uptrend and just as we noted we could not get more near-term bullish until a breakout close, Gold has not failed in the near-term until a close below 1400.

Bias: Neutral/Bullish

Resistance: 1432.9-1437.9***, 1447-1454.4**, 1467**, 1484.5***

Pivot: 1423.9

Support: 1410-1414.6***, 1400.5-1403.5***

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