Gold's Momentum Wavers as Dollar Resurgence Takes Center Stage

Gold's Momentum Wavers as Dollar Resurgence Takes Center Stage

The prevailing bullish trend in the precious metal market is encountering a slowdown, influenced significantly by the Dollar's resurging strength. A pivotal moment occurred after a spike at $2149, where the price faced rejection, marked by a series of red candles.

A compelling narrative supporting gold's demand is emerging, affirming indications that the US economy is gently transitioning into a soft landing. This economic backdrop is bolstering the appeal of gold for investors.

The recent shift in US Treasury yields, trending lower, follows the weak ADP data, casting uncertainty over the forthcoming Nonfarm Payrolls report. These figures paint a picture of a US labor market losing steam, providing grounds for speculation that the Federal Reserve (Fed) may consider initiating monetary policy easing early next year.

Tuesday's data presented a mixed scenario. While the US ISM Services PMI exceeded expectations, offering a positive note, the US JOLTS job openings survey hinted at the labor market feeling the impact of higher interest rates.

All eyes are now on the highly anticipated Nonfarm Payrolls report scheduled for Friday. Investors are keenly observing this release for crucial insights into the Fed's monetary policy plans.

Our strategy revolves around the notion of a retest of the previous Fair Value Gap (FVG) around the 2050 - 2060 area. This setup aims to provide bullish traders with an opportunity to exit at breakeven, potentially paving the way for a reversal and a return to the short side. As the market navigates economic cues and central bank signals, strategic positioning becomes paramount for traders eyeing opportunities in the gold market.


Our preference

Short positions with targets at 2000.00 & 1970.00 in extension.