- Gold price rebounds above the 20-day EMA amid accelerating Fed interest rate cut bets.
- Soft US NFP data has weighed heavily on US Treasury yields.
- Gold price oscillates inside the Symmetrical Triangle formation.
Gold price (XAU/USD) clings to gains near Friday’s high around $3,350 during the European trading session on Monday. The precious metal trades firmly as cooling labor market conditions have forced traders to raise bets supporting interest rate cuts by the Federal Reserve (Fed) in the September meeting.
Lower interest rates by the Fed bode well for non-yielding assets, such as Gold. Meanwhile, 10-year US Treasury yields trade vulnerably near almost three-month low around 4.20%.
The US NFP report showed on Friday that the economy added 73K fresh workers, significantly lower than estimates of 110K. Also, employment figures for June were revised sharply lower to 14K from 147K. The Unemployment Rate rose to 4.2%, as expected, from the prior release of 4.1%.
According to the CME FedWatch tool, the probability of the Fed cutting interest rates in the September meeting has increased to 80.8% from 41.2% seen on Thursday, a day before the release of the NFP data.
Before the US employment data, traders pared Fed’s interest rate cut bets for the September meeting significantly as Chairman Jerome Powell said in the press conference on Wednesday that there is no rush for interest rate cuts as the impact of tariffs announced by President Donald Trump has started feeding into the economy.
Gold technical analysis
Gold price bounces back above the 20-day Exponential Moving Average (EMA), which trades around $3,323. The overall trend of the Gold price remains sideways as it trades inside the Symmetrical Triangle formation, which indicates indecisiveness among market participants.
The 14-day Relative Strength Index (RSI) wobbles inside the 40.00-60.00, indicating a sharp volatility contraction.
Looking down, the Gold price would fall towards the round-level support of $3,200 and the May 15 low at $3,121, if it breaks below the May 29 low of $3,245
Alternatively, the Gold price will enter uncharted territory if it breaks above the psychological level of $3,500 decisively. Potential resistances would be $3,550 and $3,600.
Gold daily chart
