FBS: outlook for gold
Gold prices gained yesterday on the speculation that the Fed will delay reducing monetary stimulus amid the first US government shutdown in 17 years. XAU/USD has bounced of $1,270 area for the second time.
There will be no Non-Farm Payrolls release this Friday, so the market players will have to make guesses about the state of US labor market. ADP employment report revealed that private sector added just 166K jobs in September versus 180K expected. US jobless claims, on the other hand, came better than expected. It would be harder for the market players to make Fed tapering projections without. Still US budget problems allow expecting weaker USD.
Technical picture still points out to the downside risks given the break of the rising channel and the longer term bearish trend. There’s significant resistance around $1,350. This may be a hard obstacle for the bulls. Above this level look for an advance to $1,375 and $1,400. Support is located at $1,300. Failure here might give the bears power to retest the recent lows.
Chart. Daily XAU/USD