Gold (XAU/USD) finished last week little changed despite broad USD strength. Wall Street chaos could help the yellow metal reclaim its safe-haven status, FXStreet’s Eren Sengezer reports.
Key quotes
“On Wednesday, the ADP Employment Change data will be featured in the US economic docket ahead of Friday’s critical Nonfarm Payrolls (NFP) report. The market consensus points out to an increase of 85K in NFP in January. A gloomy labour market report could assist the USD to attract investors.”
“Investors will keep a close eye on the performance of major equity indexes in the US. A panic selloff in US stocks amid heightened concerns over a market bubble could lift gold higher as seen at the start of the coronavirus crisis.”
“The sharp retreat from the 100-day SMA, currently located at $1,878, suggests that sellers continue to defend this level. XAU/USD could have a difficult time pushing higher unless it manages to make a daily close above that hurdle.”
“Ahead of $1,878, $1,870 (Fibonacci 50% retracement of December rally) aligns as an interim resistance. Above $1,878, $1,890 (Fibonacci 38.2% retracement) could be set as the next target.”
“On the downside, the 200-day SMA seems to have formed key support at $1,851. If XAU/USD drops below that level, buyers could look to defend $1,845 (Fibonacci 6.8% retracement) before the price can test $1,831 (Jan. 27 low).”
