Gold futures closed higher on Friday, surging more than 1% to its highest level since July 29, as slower-than-expected U.S. jobs growth in August drove the U.S. Dollar lower, casting doubts on the Federal Reserve’s tapering timeline.
Gains may have been capped by a rise in Treasury yields. That move was fueled by a surprise jump in Average Hourly Earnings, which fanned the flames of inflation. The Unemployment Rate fell to 5.2% as expected.
On Friday, December Comex gold futures settled at $1833.70, up $22.20 or +1.23%.
The price action on Friday suggests that traders are lifting short trades placed in anticipation of a September tapering by the Fed. The big question is whether speculative buyers have enough confidence to drive prices higher.
In other news, U.S. markets are closed on Monday due to the Labor Day holiday.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through the next two main tops at $1837.50 and $1839.00 will reaffirm the uptrend. A move through $1781.30 will change the main trend to down. Taking out the main bottom at $1774.60 will reaffirm the downtrend.
The main range is $1922.00 to $1677.90. The market is currently trading on the strong side of its retracement zone at $1828.80 to $1800.00, making it new support.
The major retracement zone support is $1795.00 to $1716.00. It is also controlling the longer-term direction of the market.
The best support is the price cluster at $1800.00 to $1795.00.
Daily Swing Chart Technical Forecast
When trading resumes on Tuesday, the direction of the market will be determined by trader reaction to $1828.00.
A sustained move over $1828.00 will indicate the presence of buyers. Taking out the two main tops at $1837.50 and $1839.00 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the next major target the June 8 main top at $1919.10.
A sustained move under $1828.00 will signal the presence of sellers, or that the buying isn’t that strong. This could trigger a pullback into $1800.00 to $1795.00.
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This article was originally posted on FX Empire