Trade ideas for March 28 - April 1
Last week marked the consolidation for the most active assets of March 1-15 (which is oil and gold). But next week has a lot to show, be ready to take part!
Gold Awaits US Jobs Data
2021-09-01 • Updated
During this week gold has been consolidating in the $1807-$1820 range waiting for the US jobs data announcement. After the past release on August 6, gold fell by almost 6%.
Why is it so important?
Last week, Fed Chair Jerome Powell acknowledged in his remarks at the Jackson Hole symposium that tapering could begin this year, but the Fed will remain cautious in its decision to raise interest rates.
The labor market is one of the main indicators of the US economic health, which recovery can push the Federal Reserve to start pandemic stimulus tapering and interest rates increasing.
While gold is considered a hedge against inflation and currency debasement, caused by massive stimulus measures, higher interest rates can weaken investors’ interest in gold.
Technical analyses
4H Chart
Gold did not show an expected response to the dovish Powell’s speech. It means markets recognize that the direction for policy is now starting to wind back stimulus. In this case, any hawkish statement can weaken gold and sent it down to $1700 in a couple of hours. In this case, it looks risky to open any trades before the jobs data announcement.
- If the jobs data announcement is better than expected, the gold will drop with a target of $1730.
- If the jobs data announcement is worse than expected, the gold will rise with a target of $1830.
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