Gold inched higher on Monday, increasing the price of yellow metal to more than $1275.00 an ounce following the US nonfarm payrolls news. The technical bias remains bullish because of a higher low in the recent downside move.
As of this writing, the precious metal is being traded near $1280 an ounce. A hurdle can be noted near $1295, the high of the last major upside rally ahead of $1300, the psychological level as demonstrated with red color in the given below chart. A break and daily closing above the red mark shall trigger renewed buying interest, validating a rally towards the $1340 resistance zone.
On the downside, a support may be noted around $1271, an immediate trendline support ahead of $1249, the lower trendline support and then $1250, a key horizontal support as well as psychological number. The technical bias shall remain bullish as long as the $1249 support area is intact.
US Nonfarm Payrolls
U.S. job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labor market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3 percent. Nonfarm payrolls increased 138,000 last month as the manufacturing, government and retail sectors lost jobs, the Labor Department said on Friday. The economy created 66,000 fewer jobs than previously reported in March and April. Last month’s job gains could still be sufficient for the Federal Reserve to raise interest rates at its June 13-14 policy meeting. The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.
Considering the overall technical and fundamental outlook, buying the precious metal around current levels appears to be a good strategy in short to medium term.