On the downside, following the pivot at $4633.00, traders could target several layers of potential support. They include the long-term Fibonacci level at $4541.88, followed by the short-term retracement zone at $4481.78 to $4401.84. Inside this area is the swing bottom at $4501.04 and $4481.78, which is the level that separates a bull market from a bear market. $4401.84 is the last support before the 200-day moving average at $4308.73, which is controlling the long-term trend.
Our focus today is on the 50-day MA at $4780.78. Aggressive buyers are going to have to start taking out offers to fuel a breakout over this indicator, or sellers will reemerge to drive prices back into our support cluster. In strong markets, traders tend to take out offers, fueling the rally. This will not become a strong rally until buyers can overcome the 50-day MA with conviction.
Passive buyers will be looking for the dip back to at least $4633.00. If successful, a secondary higher bottom will form and the ball will be back in the court of aggressive traders. If buyers don’t show up at $4633.00, then look for another test of the support cluster at $4541.88 to $4401.84.
Buyers will keep coming in on the dips as long as the 200-day MA holds and sellers are expected to continue to respect the 50-day MA until overtaken with conviction.
What I’m Watching Into the Close
The payrolls number is the event. Everything else today is noise until that print hits. If it comes in at 62,000 or below, expect gold to push hard at the 50-day moving average at $4,780.78. If it beats and the labor market looks stronger than expected, watch the $4,685.27 level. That is where the bearish reversal top from Thursday gets confirmed and the selling resumes.
The broader trend is still intact as long as oil keeps falling and the ceasefire holds. I’ve seen this kind of setup before where geopolitical news creates a window and the market either runs through it or wastes it. Right now gold is not wasting it.
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