Gold price dropped after the US Labor Department reported employment figures, which exceeded estimations, justifying the Fed’s need for further tightening, bolstering the greenback. Therefore, XAU/USD is trading at around $1690, below its opening price.

Before the US Nonfarm Payrolls report was released, the yellow metal meandered around $1710. However, once the headline crossed newswires, gold’s initial reaction slid towards the $1700 region, but the initial move dissipated. Nevertheless, at the time of typing, it extended its losses below $1700 in a volatile reaction.

Gold below $1,691/76 completed a large ‘double top’ but is now hovering slightly back above this level. However, we expect gold to come under renewed pressure during Q4, also due to the fact that it remains still clearly below the falling 200-day average, currently seen at $1,824. We note that the next support is seen at $1,620/14, then $1,560 and eventually $1,451/40

Only a convincing weekly close above the 55-day average at $1,724 would ease the pressure on the precious metal, with next resistance then seen at the even more important 200-day average at $1,824, which we would expect to cap at the very latest.

On a four-hour scale, the gold prices are oscillating around the 50% Fibonacci retracement (placed from an August 10 high at $1,807.93 to September low at $1,614.85) at $1,711.60. The precious metal has corrected to near the 20-period Exponential Moving Average (EMA) at around $1,709.00 after sensing barricades around $1,730.00.

The Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range from the bullish range of 60.00-80.00, which signals a loss in the upside momentum.

Gold Taking Support of Strong Order Block Above Daily Low

Oct 07 2022

Stop Loss -1.99%

Holding time 3d8hr

1685.28

Entry price

1651.71

Stop loss price