Gold Price Outlook Mired by Failure to Push Above 50-Day SMA – DailyFX

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Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
The price of gold snaps the series of higher highs and lows from last week as it pulls back from the monthly high ($1788), and the precious metal may track the negative slope in the 50-Day SMA ($1791) as it fails to push above the moving average.
The price of gold struggles to hold its ground following the unexpected uptick in the ISM Non-Manufacturing survey as the development wards off fears of a US recession, and bullion may face a further decline throughout the opening range for August amid the recovery in Treasury yields.
As a result, the update to the Non-Farm Payrolls (NFP) report may influence the price of gold as the US economy is expected to add 250K jobs in July, and a further improvement in the labor market may push the Federal Reserve to implement a highly restrictive policy as the central bank struggles to tame inflation.
In turn, the precious metal may largely mirror the price action from June as the rebound from the yearly low ($1681) stalls ahead of the 50-Day SMA ($1791), and the price of gold may struggle to hold its ground throughout the opening range for August as it snaps the series of higher highs and lows from last week.
With that said, the US NFP report may drag on the price of gold as a further improvement in the labor market puts pressure on the Federal Open Market Committee (FOMC) to deliver another 75bp rate hike, and the precious metal may continue to track the negative slope in the moving average as the indicator appears to be acting as resistance.
Source: Trading View
— Written by David Song, Currency Strategist
Follow me on Twitter at @DavidJSong
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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