Gold moved lower after reaching $1,438 recently. The price has given in to the downward pressure. However, if the price breaks below $1,412, it will trigger impulsive bearish momentum.
Ahead of NFP today, the gold price is making a correction. All eyes are now on the US non-farm payrolls. Employment in the US public and private sectors is expected to have jumped by 160,000 in June, much stronger than 75,000 in May. A weaker-than-expected figure in the jobs report could raise expectations that the US Federal Reserve would cut interest rates at its nearest policy meeting on July 30 and 31.
Despite a correctional decline, gold remained on track to log a seventh straight week of gains, bolstered by President Donald Trump's nomination of two dovish candidates to head the Federal Reserve and a surprise announcement that Christine Lagarde will be the head of the European Central Bank. In the environment of lower interest rates, investors' appetite for gold strengthens as the opportunity cost of holding the precious metal decreases relative to other interest-bearing assets such as bonds.
To sum up, a correctional decline of the gold price could be quite shorter than expected. Then, the price will resume its rally. As the global economy is struggling to maintain momentum, the precious metal is still viewed as safe haven investment around the world. Though gold could make corrections and dips, any weakness in USD will encourage gold to gain further impulsive bullish momentum. On the other hand, upbeat US nonfarm payrolls will cause more corrections and retracements.
TECHNICAL LEVELS:
SUPPORT: 1,350, 1,380, 1,412
RESISTANCE: 1,438, 1,440, 1,450
BIAS: BEARISH
MOMENTUM: VOLATILE
