Tomorrow’s NFP report out of the US will provide another catalyst, and any disappointment can rally gold and other safe-haven assets. US Dollar weakness will boost prices as well, as gold remains priced in the greenback, and both assets enjoy an inverse relationship. Volatility is likely to remain elevated as bulls and bears battle around the psychological 1,800 level.
The forecast for gold remains bullish after the recovery from its flash crash last month. Global economic data has clocked in below expectations for several weeks, and inflationary pressures remain elevated. While the Tenkan-sen and the Kijun-sen entered a sideways trend, the Ichimoku Kinko Hyo Cloud shows signs of rising bullish pressures. The CCI moved into extreme overbought territory before retreating and is expected to push higher once again.
Should price action for GOLD/USD remain inside the or breakout above the 1,801.60 to 1,833.55 zone, recommend the following trade set-up:
Should price action for GOLD/USD breakdown below 1,801.60, recommend the following trade set-up: