The Gold Spot (XAUUSD) seemed to be having a delayed reaction following the release of the nonfarm payroll report by the US Bureau of Labour Statistics on Friday, where the US session was closed due to the observation of Good Friday. The jobs data report for March came in at 236k, lower than expectations of 239k but down from 326k for February, with the unemployment rate lowering to 3.5% from 3.6%. The report supported the sentiment that the Federal Reserve could consider a 25-basis point rate hike rather than a pause in May.
The non-yielding bullion tracked higher during the Tuesday trading session as the European markets reopened after Easter. The market has dragged the US dollar as investors take bets on the FOMC meeting minutes and the inflation data from the US to be released tomorrow. The weakening of the greenback during the trading session helped the non-yielding bullion to trade 0.56% higher during the trading session.
The 4H chart shows that there was a profit-taking session after the price action broke above the previous psychological level at $1987.72 per ounce (/ounce), but the pullback respected the longer-term uptrend. With the concerns surrounding a potential recession, the safe-haven properties of the non-yielding bullion could entice the bulls to retest the last swing high at the resistance level of $2032.42/ounce. The next resistance level sits at $2049.88/ounce, a fraction of the all-time high of $2075.21/ounce.
Failure of the bulls to completely regain dominance and continue the longer-term trend could push the price action below the psychological level at $1987.72/ounce, leaving the 23.60% Fibonacci retracement level as the next hurdle to the bears’ run. A sustained break below the 23.60% Fibonacci retracement level at $1981.45/ounce could signal the presence of sellers would bring the support level at $1943.96/ounce and the 50% Fibonacci retracement level into play.
It has been tentative times for the greenback as the recent macroeconomic indicators raised concerns of a possible recession in the US. The concerns have been a haven sent for the safe-haven gold, and the bulls could be confident in extending their rally and retests the resistance level at $2032.42/ounce if the concerns continue to drive the market.
Sources: TradingView, Reuters, Dow Jones Newswire.
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