Gold Price Eyes $1,760 Following Sharp Decline on US Jobs Data

After spending the first half of the day moving sideways near $1,800, the gold price fell sharply in the early American session and was last seen trading at its lowest level since early July at $1,174, losing 1.7% on a daily basis.

Renewed USD strength following the impressive July jobs report from the US seems to be weighing heavily on gold on Friday. 

The US Bureau of Labor Statistics announced that Nonfarm Payrolls (NFP) in the US rose by 943,000 in July, compared to analysts’ estimate of 870,000. Moreover, June’s increase got revised up to 938,000 from 850,000 and the Unemployment Rate declined to 5.4% from 5.9% in June.

Reflecting the positive impact of the NFP data on the greenback, the US Dollar Index advanced to its highest level in more than a week and was last seen gaining 0.38% on the day at 92.61.

Commenting on the data, “with these figures, has the US economy made “substantial further progress? That is the term the all-powerful Federal Reserve set for withdrawing stimulus. The answer seems to be positive,” said GoldSilverReports analyst Neal Bhai. “Prospects of fewer dollars printed mean a stronger greenback, while the specter of rate hikes gives investors a cause for a pause when coming to stocks.”

Gold Price Technical Outlook

With this recent decline, the Relative Strength Index (RSI) indicator on the daily chart dropped below 40 but continues to stay above 30, suggesting that there is more room on the downside before gold become technically oversold. Furthermore, the pair remains on track to close below the 100-day SMA for the first time since mid-June, reaffirming the bearish shift in the near-term technical outlook.

On the downside, the initial resistance is located at $1,760 (static level). Below that level, the next target could be seen at $1,750 (June 29 low).

Resistances, on the other hand, are located at $1,800 (psychological level), $1,805 (100-day SMA) and $1,820 (200-day SMA).

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Gold Price Eyes $1,760 Following Sharp Decline on US Jobs Data via @goldsilverrepor
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2 thoughts on “Gold Price Eyes $1,760 Following Sharp Decline on US Jobs Data”

  1. Nonfarm payrolls increased by 943,000 for the month while the unemployment rate dropped to 5.4%, according to the department’s Bureau of Labor Statistics. The payroll increase was the best since August 2020. Economists surveyed by Dow Jones had been looking for 845,000 new jobs and a headline jobless rate of 5.7%. However, estimates were diverse amid conflicting headwinds and tailwinds for the jobs market and an uncertain path ahead for the economy. Jeff Cox, “Payrolls Increase 943,000 in July as Unemployment Rate Slides to 5.4%,” August 6, 2021.

  2. “Domestic gold and silver prices and Bullion Index futures will start with a gap down trade this Monday morning, tracking overseas prices. On the domestic front, if MCX Gold October starts below 46650 we could witness that the futures could continue its correction up to Rs 46,380-46,100 levels. Resistance is at Rs 46,800-47,000 levels. On the domestic front, MCX Silver September is sustaining below Rs 65,000 below which could see Rs 64,090-63,200 levels. Resistance is at Rs 65,500-66,250 levels,” he furhter mentioned.

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