Gold prices are primed for major volatility with the U.S. Non-Farm Payrolls (NFP) report right around the corner. Gold bulls are looking for a NFP print that’s weaker than expected to push prices higher. This surge is even more likely if gold breaks above significant resistance. Consequently, gold has been firming above the 3250-3300 support zone. It’s been a consistently hot area that has a strong base for potential upward movement.
The highly-anticipated NFP report, due out this Friday, will be likely to add further volatility to an already-volatile gold market. A disappointing jobs report would likely put downward pressure on the U.S. dollar, thus pushing gold prices higher. Gold is particularly sensitive to dollar appreciation. Accordingly, if the dollar weakens, the price of gold is expected to increase.
Gold’s price action today is suggestive of a range-bound, choppy environment on the 4-Hour timeframe. The precious metal has managed to trade above the 50% retracement of this recent range, suggesting underlying strength at a high price level. For more upside potential, gold must convincingly clear the important 3330 level. According to analysts, a firmly established move above this price point will be key to confirming any bullish sentiment.
Because of this, the 3250-3300 area is an important zone of support. Buyers have been all too eager to jump in this space, showing fierce competition. This ongoing purchasing trend indicates that the price of gold might show remarkable strength, even during challenging market environments. Daily Fair Value Gap gold is still open between 3250 – 3285. This range makes it that much more important as a key support level.
If gold can keep its place above the 3250-3285 support zone, it may look for upside liquidity towards 3370. According to analysts, if the prices manage to break above 3330, it might initiate a rally towards 3400. This new development places traders and investors in a uniquely attractive situation.
The present market environment illustrates major regional and national economic trends. Investors are warily pricing in some Fed easing later this year. Such easing measures, if introduced, would provide a backstop for gold prices in the event of an NFP miss. The nearest support level for the U.S. dollar is 99.129. Should the dollar weaken further than this, it might enhance gold’s bullish outlook even further.