The spot gold futures contract was indecisive most of last week. The spot contract fell sharply on Wednesday after the U.S. Federal Reserve’s policy announcement.
The Federal Reserve said that they would begin scaling back their pandemic era monthly asset purchase program later this month.
On Thursday, the spot gold contract found a bid and pushed back higher to $1,800 per ounce. Falling Treasury yields, including the benchmark ten year U.S. Treasury bond yield. This helped support the spot gold contract despite a broadly strengthening U.S. dollar.
Also on Friday, the U.S. Labor Department released their October non-farm payroll (NFP) report. The world’s largest economy added 531,000 jobs in October. This was above the forecast for 435,000 new jobs. The unemployment rate fell to 4.6 percent.
This is mainly due to a shrinking workforce. The U.S. labor participation rate was unchanged at 61.6 percent. The economic calendar for Monday is quiet.
The monthly Sentix investor confidence survey for the euro area will be published. The economic calendars for the United States and United Kingdom are quiet.
Daily Spot Gold Technical Analysis
Looking at the above daily spot gold futures chart (XAU/USD), the spot contract is trading above the fifty, one hundred and two hundred (50, 100, 200) day simple moving averages. The 14 day relative strength index (RSI) has moved above the mid-line which could be a good sign for the bulls.
On the upside, there is a static upside barrier lining up at $1,810 per ounce. The next upside barrier lines up at the 38.2 percent Fibonacci level. This resistance level is near $1,820 per ounce. A daily close above this level opens the door to challenge $1,835 per ounce.
On the downside, immediate technical support lines up at the 200 day simple moving average. This downside barrier comes into play around $1,785 per ounce. The next layer of support lines up at the 61,8 percent Fibonacci level near $1,770 per ounce.