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Gold consolidates losses near $ 1275 ahead of US NFP

  • Gold weaker, but in range.
  • USD, USTs attempt recovery in Europe.
  • US NFP holds the key.

Gold futures on Comex stalled its retreat from near $ 1280 region and entered a phase of consolidation during the European session, as investors turn cautious ahead of the critical US jobs report.

Gold eyes $ 1260 on solid NFP

Gold experiences a typical ore-NFP caution trading, as markets refrain from placing any directional bets before the release of the US labor market report, as the outcome usually spurs massive volatility across the financial markets, heavily impact the USD-sensitive gold.  

A strong jobs report would seal in a Dec Fed rate hike while boosting the rate hike expectations next year, which could push the US yields higher at the expense of the non-interest bearing gold.

Over the last hour, the prices have managed to hold above $ 1275 mark, as the bulls derive support from the lackluster trading seen on the European equities, while renewed geopolitical tensions surrounding North Korea also keeps the downside limited.

Headlines crossed the wires earlier today from the South Korean Intelligence sources, citing that North Korea is preparing additional nuclear and missile tests. This comes ahead of the US President Trump’s visit to Asia next week.

All eyes now remain on the US non-farm payrolls data for the next direction on the US dollar, eventually impacting the yellow metal.

Gold Technical Outlook

The Dukascopy Bank Team explained:  “A combination of the 55-, 100- and 200-hour SMAs in conjunction with the weekly PP located at 1,274.00 suggests that the pair most probably is going to make a breakout in the upward direction. On the other hand, that side also contains a combined resistance set up by the 61.8% Fibonacci retracement level and the updated monthly PP 1,279.41. For this reason, the fully-fledged breakout most probably will be postponed until the release of information on the American employment change and change in salaries.”

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