If you are hoping for a pull back to buy into the gold rally, there are signs one might be getting close. As we head into the US non-farm payrolls release, the gold chart is suggesting a short term bias to the downside.
Gold may be more likely to sell off on jobs data that’s close to or better than expectations, than it is to rally on a soft number. As usual, technical analysis is only a guide. If the jobs number is really weak, the market is likely to respond by selling the US dollar heavily, and this would be bullish for gold.
Yesterday’s daily candle made a lower high and a lower low. It’s done this from a harmonic level where the latest CD swing is pretty much the same size as the previous upswing (AB). All this is happening when the slow stochastic momentum oscillator in the box below the chart is up in the overbought zone, as it was when the last uptrend peaked.
If there is a pullback in gold, we may see a test of past resistance and the 38.2% Fibonacci retracement level around $1308.
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