Forex Marketz Daily Forex News – Fully Markets Update
The widely traded spot gold futures contract fell sharply last Thursday as the U.S. dollar was broadly higher. The gold contract did find some support near the rising trend line in play since the middle of March/early April that has been guiding prices higher.
The spot gold contract was affected by last week’s commentary out of the Federal Reserve as well as key monthly U.S. labor data. Last week, the Fed announced the end of some of their pandemic era monetary policy support programs. Philadelphia Fed President Patrick Harker also spoke. He said it was time to think about tapering.
On Wednesday, the private ADP non-farm unemployment change for May came in stronger than expected. Private U.S. company payrolls increased by 978,000 new jobs. Also published on Wednesday, the Labor Department’s weekly initial jobless claims fell below 400,000 for the first time since the global pandemic.
The monthly non-farm payroll report was a bit of a disappointment. The U.S. economy added less jobs than forecasted. Monday’s economic calendar is fairly light. The United States is publishing weekly consumer credit data. Sentix will publish their monthly European Union economic sentiment index and Germany will release monthly industrial production data.
Daily Spot Gold Technical Analysis (XAU/USD)
Looking at the above daily MT 4 spot gold futures chart (XAU/USD), the 14 day relative strength index (RSI) is below seventy (70) after falling sharply lower on Thursday. This was, probably, a correction for gold prices from overbought levels.
The ascending trend line, mentioned above, held as support preventing further losses for the bullion on Friday. The price of gold also closed above the twenty (20) day simple moving average as bargain hunters jumped into the market.
On the downside, initial technical support lines up at the 20 day simple moving average at $1,870 per ounce. The rising trend line comes into play at $1.860 with the 200 day simple moving average coming into focus at $1,840 per ounce.
Initial technical resistance lines up at the key psychological level of $1,900 per ounce. The multi-month high price point, set on 1 June, lines up at $1,916. The next upside level is at $1,930.
