The widely popular spot gold futures contract surged higher on Friday. The bullion closed the week above $1,827 per ounce after dismal U.S. labor numbers sent the U.S. dollar lower. This futures contract is also trading near the 38.2 percent Fibonacci level.
Gold traders were happy with worse than expected American labor numbers. This led to a weaker greenback. The U.S. monthly non-farm payroll (NFP) report was quite bad. In August, the U.S. economy added only 235,000 new jobs.
This was well below expectations for gain of 750,000 jobs for August. The monthly unemployment rate fell to 5.2 percent and labor force participation rate was flat at 61.7 percent for the month.
The United States financial markets are closed for the Labor Day holiday on Monday. The Eurozone will publish some economic data. Germany will release monthly factory orders as well as their construction purchasing managers’ index (PMI).
The Eurozone Econfinance meeting will also take place during euro are trade hours. BRC like for like retail sales numbers will be published for the United Kingdom. The UK will also release their monthly construction purchasing managers’ index.
Daily Spot Gold Technical Analysis (XAU/USD)
Looking at the above daily spot gold futures MT 4 price chart, the 14 day relative strength index (RSI) has moved higher as bullish momentum builds up. Also, the RSI is below 70 and not near overbought which signals possible more upside is possible.
Volatility and trade volume should be quiet for the spot futures contract on Monday due to the U.S. Labor Day holiday. Initial technical resistance lines up at $1,845 per ounce. The 23.6 percent Fibonacci level lines up at $1,855.
On the downside, support comes into play at $1,830 per ounce. The next downside barrier lines up at $1,810 and then the 200 day simple moving average at $1,810 per ounce comes into the picture.