Jobs report a severe blow for gold
It feels a long time ago since gold was rallying on the back of a poor ADP number and expectations that it may signal a weaker jobs report and nudge the Fed in a dovish direction.
The yellow metal has gone from threatening to break $1,833 – and the 50 fib – to the upside to smashing through $1,790 support in just a couple of days, courtesy of a strong ISM reading, hawkish comments from the Fed’s Clarida and finally, a knockout jobs report.
Today was the final nail in the coffin and gold is suddenly looking in a very vulnerable position. Already it has its sights set on $1,750 but the reality is there could be further to fall.
It’s going to take some dreadful data over the next month to stop the Fed announcing something on tapering in September and with Jackson Hole only a few weeks away, at which policy makers including Jerome Powell could lay the groundwork, time is running out.
Should gold rebound off $1,750, then the key test to the upside will come around that previously reliable at $1,790. But a look at the momentum indicators suggests any corrective move may not yet be forthcoming.
A break of $1,750 shines a light on $1,720 and $1,700, with $1,675 then interesting below that, should it get that far.
Who knows what the next couple of months will throw up but the last 48 hours have been a gold.blow for
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