The bullish set up is simple. Hold the 200-day moving average, produce enough upside momentum to overtake $4481.78 and take a run at the 50-day moving average at $4630.16, which has been capping gains since late March.
The bearish set up requires the long-term traders to pull their bids at or under the 200-day moving average. This could trigger a fast break into the minor bottom at $4366.23. If this price is taken out with conviction and heavy volume, prices could collapse hard. There is no major support until $4099.12.
What to Watch
The May Nonfarm Payrolls report is the gate for Spot Gold (XAUUSD). Consensus at 80,000 jobs is already a slowdown from April’s 115,000. Goldman Sachs, EY-Parthenon, and Vanguard are all below that. The labor market data around the edges, quits rate at a four-year low, Challenger layoffs at post-pandemic highs, jobless claims climbing, all say the weakness is already there. If it shows up in this morning’s print the rate-cut trade comes back and gold gets the bid.
The problem is crude oil. Spot Brent crude oil gained nearly 3% this week and the Strait of Hormuz is still restricted. As long as energy costs stay elevated Cleveland Federal Reserve President Beth Hammack and the rest of the committee have cover to stay restrictive. Gold needs weak jobs and falling crude oil at the same time to break out of the range it has been stuck in.
The 200-day moving average at $4,428.44 held again early Friday. A sustained hold above $4,481.78 shifts the tone bullish and targets the 50-day moving average at $4,630.16. A break below the 200-day opens the door to $4,366.23 and there is nothing major between there and $4,099.12.
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