GOLD enjoyed the roller coaster ride, will it continue next week?
U.S. Fed policy decision and Economic data resulted in a speculative up and down move in GOLD Future last week. GOLD Future tested its lifetime high 58847 on Thursday as dollar slump and then fall on Friday, after U.S. Nonfarm payroll data increased unexpectedly.
Gold prices surged over 1% after the Fed hiked interest rates by a relatively smaller 25 basis points (bps) and acknowledged its progress against inflation. But the central bank also expressed uncertainty over where interest rates will peak.
This drove up expectations for a pause in the Fed’s interest rate hikes by mid-2023 and a potential reduction in interest rates by the end of the year as U.S. economic growth cools. Such a scenario is likely to be positive for gold.
However, Yellow metals retreated sharply, on Friday after a blockbuster U.S. jobs report for January triggered profit-taking on the precious metal’s long-running rally, putting it way off the $2,000-an-ounce target eyed by bulls in the space.
U.S. NFP added 517,000 jobs last month versus a forecast 188,000 and against December’s 260,000.
COMEX GOLD future jumped to a weekly high $1975.20 an ounce, and settled at $1876.60 an ounce. It made a weekly low $1874.50 an ounce. While, MCX GOLD future made a lifetime high 58847 and made a weekly low 56544, before closing at 56585.00.
Technical
On the above daily chart, GOLD Future retreated from the peak 58848. Last week, GOLD future broke its crucial support 56580 and formed a long bearish candlestick which is indicating bearish momentum in the near future. Further, RSI 14 and its 9 SMA also give negative crossover which also indicates bearish momentum.
Hence, it’s expected that any rise towards 56850-57000 will attract near future selling activities. First target would be 56580 then 56250. Stop loss will be 57120.00
Alternatively, on the upside, massive resistance is seen at 57580 and possible pullback could expect above it for the upside level of 57750-58000.