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Gold futures technical analysis ahead of the NFP report

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(Kitco News) - Gold has had an impressive breakout over the last 24 hours and it will be interesting to see if this can be sustained today as we get the latest non-farm payroll (NFP) report from the U.S. Historically the NFP causes some decent volatility in the yellow metal and as the employment level is a key part of the Fed's mandate this time could be the same. 

The analyst consensus is for 978K jobs to be added in April and for the unemployment rate to drop to 5.8%. If the situation does improve beyond the estimates and the high (NFP) and low (unemployment rate) estimates this could spell bad news for the yellow metal as there could be some more bets coming in that the Fed could increase their key interest rate or reduce stimulus quicker than expected. Nomura and Goldman Sachs have given the highest estimate of 1,300K jobs to be added while BBVA has the most bearish view with an expectation of just 800K.

Looking at the technicals the grey shaded areas shows the high volume nodes from the composite volume profile indicator on the right. These points demonstrate where most contracts have been traded on the chart (at price). These areas tend to act like sticking points for the price and there could be a reaction should the price reach any of these levels. 

The green resistance level at $1878.9/oz is the next major zone the bulls will need to breach to keep the run going and on the downside, the $1759.8/oz is the next major support. Another key feature on the chart is the rising wedge pattern marked by the red trendlines. Interestingly, the price stalled to the upside at the technical zone and if there is to be another push higher the trendline will need to be overcome. Overall, it's clear that the bulls are in charge of this market at the moment but the NFP is always a binary risk event that could throw a spanner in the works. 


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