The price of gold extended downside movement on Friday, for the second week in a row, printing the worst losing streak of 2015. The technical bias still remains bearish in the long run due to a Lower Low on daily and weekly charts.
As of this writing, the precious metal is being traded near $1266. A support can be seen near $1263, the 61.8% fib level ahead of $1238, the 50% fib level and then $1200, the psychological number as demonstrated in the following weekly chart.
On the upside, the yellow metal is expected to face a hurdle near $1294-$1300 which is the confluence of 76.4% fib level as well as trendline resistance. A break and daily closing above the trendline could open doors for further rallies toward the $1344 and $1400 milestones.
The US Bureau of Economic Analysis is due to release the nonfarm payrolls figure today during the early New York session. According the average forecast of different analysts, the nonfarm payrolls remained 220K in January as compared to 252K in the month before. Generally speaking, higher nonfarm payrolls reading is considered positive for the economy thus a worse than expected actual outcome will be seen as bullish for the yellow metal and vice versa.
The US Labor Department will release the jobless rate figure today. According to the median projection of different economists, the jobless rate remained steady at 5.6% in January as compared to the same rate in the month before. Generally speaking, lower jobless rate is considered positive for the economy thus a better than expected actual figure might incite bullish momentum in gold and vice versa.
Considering the overall technical and fundamental outlook, buying the precious metal near the $1200 support area appears to be a good strategy in short to medium term, the trade should however be stopped out on a daily closing below the $1200 support area.
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