Gouden Rally is confronted with resistance as overbough’s signals appear
Gold’s five-session winning series has been paused, but the momentum remains strong. The recent rally was fed by escalating trade tensions between the US and China, which increased economic uncertainty and raised questions about the Federal Reserve policy path.
Despite the light pullback, the technical indicators of Gold caution suggest. The relative strength index (RSI) is around 76, which indicates overbought conditions. Historically, RSI levels above 70 increase the chance of a short-term correction, because traders want to increase profit.
However, the global risk retirement continues to support gold. The concern of the trade war has stimulated the demand for safe haven, but the possibility of long -term inflatory pressure as a result of rates can also shift sentiment. If the Fed signals a long -term period of higher interest rates, gold can be confronted with renewed sales pressure.
American baneng data in focus as treasury yields tap higher
Traders now focus their attention on Friday Niet -Boeren (NFP) report on Friday, which could influence the rate views of the FED. Treasury outputs have risen higher as the markets brace themselves for labor data, in which economists predict 175,000 banent additions and an unchanged unemployment rate of 4.1%. A stronger than expected report could strengthen expectations that the FED will maintain the restrictive monetary policy and put it under pressure. Conversely, a weaker print could revive speed -related bets and support the metal.
The ADP report on Wednesday showed that private payroll grew by 183,000 in January, which exceeds expectations. This contributes to speculation that the labor market remains resilient, which could challenge the hope of speed reductions in the short term.
Trade tensions remain a wildcard for gold prices
Although the initial fears of rates have disappeared, the uncertainty remains. President Trump recently announced a temporary 30-day break for new rates for Mexican and Canadian goods, which makes some worries facilitated. However, China has taken revenge with its own rates, including a 15% duty on the American liquid natural gas and other selected products, from 10 February. Every further escalation can stimulate the renewed demand for safe port for gold.