Friday’s news that the rate of unemployment in the USA fell unexpectedly to 3.5% was negative for gold even though the NFP itself missed the consensus slightly below 190,000. On the whole, the fundamental situation for gold at the moment is quite challenging because many participants and central banks are at least somewhat confident of a soft landing rather than a major recession, and various analysts are now expecting a general recession to occur no earlier than the first quarter of next year.
In the meantime, rates in the USA and some other countries are higher than inflation and nearly certain to remain so for at least the next few months. Since gold doesn’t pay interest, but usually costs money to store, this situation would usually hit deliverable demand for the yellow metal.
On the chart, movement in the last few weeks has been mostly consistent with the tone of the news and sentiment plus the expected lower volume in high summer. The 38.2% weekly Fibonacci retracement slightly below $1,890 remains the key support which is unlikely to be broken this month unless sentiment changes and upcoming data surprise.
In the short term though the main support in view is the 200-day moving average around $1,925. A range between there and $1,975 seems possible in the next few weeks, though this might contract around the 23.6% Fibonacci retracement if this week’s releases are more-or-less in line with expectations.
In the meantime, rates in the USA and some other countries are higher than inflation and nearly certain to remain so for at least the next few months. Since gold doesn’t pay interest, but usually costs money to store, this situation would usually hit deliverable demand for the yellow metal.
On the chart, movement in the last few weeks has been mostly consistent with the tone of the news and sentiment plus the expected lower volume in high summer. The 38.2% weekly Fibonacci retracement slightly below $1,890 remains the key support which is unlikely to be broken this month unless sentiment changes and upcoming data surprise.
In the short term though the main support in view is the 200-day moving average around $1,925. A range between there and $1,975 seems possible in the next few weeks, though this might contract around the 23.6% Fibonacci retracement if this week’s releases are more-or-less in line with expectations.