Technical Analysis

GOLD Analysis – September 03, 2021

By LonghornFX Technical Analysis
Sep 3, 20213 min

Eyes on US NFP Figures

Gold prices reached a high of $1819.55 and a low of $1806.75 before closing at $1811.45. Despite the continued decline in the value of the US dollar, gold prices began to decrease on Thursday after being flat across the trading session. The US Dollar Index, which gauges the dollar's value against a bundle of six major currencies, declined for the fifth straight session on Thursday, reaching 92.21, its lowest level in a month. On Thursday, the yield on the benchmark 10-year note in the United States fell to 1.28 percent. This contributed to the dollar's depreciation.

On Thursday, the precious metal was under pressure as investors overlooked a weaker dollar and squared positions, with the focus remaining on Friday's non-farm payrolls data, which might influence the Federal Reserve's tapering policy. The gold market appeared to be waiting for the jobs report and uninterested in anything else that was causing it to consolidate.

Although the US dollar was down across the board on Thursday, bullion ignored it and continued to slide. Gold often gains value as the dollar weakens, making gold more affordable to holders of other currencies. However, amid rising coronavirus cases, some market participants took note of statistics showing that fewer Americans filed jobless claims last week.

On the statistical front, the Challenger Job Cuts for the year fell to 86.4 percent in August from 92.8 percent the previous month at 16:30 GMT. Unemployment Claims from the previous week fell to 340K against a prediction of 342K at 17:30 GMT, supporting the US dollar. Gold suffered yet another setback as a result of this. The Revised Nonfarm Productivity for the quarter also fell to 2.1 percent, vs. a forecast of 2.4 percent, which boosted the dollar and drove yellow metal lower.

The quarter's Revised Unit Labor Costs jumped to 1.3 percent in August, beating expectations of 1.0 percent, bolstering the US currency, and putting more downward pressure on gold. The July Trade Balance remained unchanged at -70.1 billion dollars, as expected. Factory Orders for July were unchanged at 19:00 GMT, matching the expected 0.4 percent.

Meanwhile, White House coronavirus response coordinator Jeff Zients announced that the US would invest $3 billion in the vaccine supply chain in the coming weeks. According to the official, immunization was necessary because the delta variation spread and instances grew, even among children. He went on to say that the investment will help fulfill President Joe Biden's promise to be the world's "arsenal of vaccines."

GOLD Intraday Technical Level

Support Resistance

1806.65 1824.75

1796.15 1832.35

1788.55 1842.85

Pivot Point: 1814.25

GOLD - Technical Outlook

The precious metal continues to consolidate in a narrow trading range of 1,815 – 1,808 levels. Gold is trading with a neutral bias at the 1,812 level. However, the metal entered the oversold zone, and now it's experiencing a bearish correction below 1,814 resistance levels. On the lower side, gold's immediate support prevails at 1,807, and 1,795 levels. Furthermore, the bearish breakout of the 1,795 level exposes gold prices towards the 1,785 level.

On the higher side, the breakout of the 1,814 level can expose the metal towards 1,821, 1,829 and 1,841 levels. On the hourly timeframe, the RSI level is holding in a selling zone. Thus, the odds of a selling bias remain strong until the 1,807 level. The bearish bias remains strong below the 1,814 level and vice versa. All the best.


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