Gold Price Analysis: Testing Weekly Top Amid Weak Dollar

• The greenback fell after several reports showed a mixed picture of the economy.

• The US private sector hired an additional 99,000 people, missing estimates of 144,000.

• Investors will pay close attention to the upcoming nonfarm payrolls report.

Gold price analysis points to solid bullish momentum as the yellow metal trades near a one-week high. Gold rose in the previous session as the dollar fell after mixed economic signals. A weak dollar makes bullion cheaper for foreign traders, increasing demand.

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On Thursday, the greenback fell after several reports showed a mixed picture of the economy. However, rate cut expectations remained high, putting pressure on the currency and supporting gold.

The US private sector hired an additional 99,000 people, missing estimates of 144,000. That was a red flag for the labor market, raising the odds that the nonfarm payrolls report would also be weak. A weak labor market increases the likelihood of a 50 bps rate cut, which is bullish for gold. At the same time, it increases the risk of a recession. In times of economic uncertainty, investors run to safe assets such as gold.

However, other US economic reports showed a slightly different picture. Jobless claims fell more than expected last week, easing fears of high unemployment. At the same time, business activity in the service sector increased, showing economic resilience. Clearly, there are strengths and weaknesses in the US economy. However, the Fed’s focus is the labor market.

Accordingly, investors will pay close attention to the upcoming nonfarm payrolls report. A weaker-than-expected performance will likely increase rate cut bets and push gold prices to new highs.

Key Gold Events Today

• US Average Hourly Earnings m/m
• The shift in the U.S. non-farm labor force
• US unemployment rate

Gold Price Technical Analysis: Bulls stall at $2,520 resistance

Technically, gold is retesting the 2520.09 resistance level, with the price above the 30-SMA. At the same time, the RSI is supporting a bullish momentum above 50. Hence, the trend is bullish. In particular, gold consolidated for a period between the support of 2480.38 and the resistance of 2520.09.

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The previous trend was bullish, increasing the chances of the price breaking the range resistance. However, the RSI is showing weaker bullish momentum as it trades in a bearish channel. Therefore, in order to overcome channel resistance and reach a new high, bulls need an increase in momentum.

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