During Wednesday's Asian trading session, spot gold staged a strong rebound following a decline in the previous session. The price of gold is currently near $5,060 per ounce, registering a significant intraday increase of approximately $35. Valeria Bednarik, Chief Analyst at FXStreet, has provided an analysis of the technical outlook for gold.
Bednarik noted that gold is currently holding above the $5,000 per ounce level but has been unable to surpass last week's high of $5,092. Bullish investors remain in control of the market, with participants awaiting the release of the Non-Farm Payrolls report.
On Tuesday, spot gold had closed down by $32.68, a decline of nearly 0.7%, settling at $5,025.21 per ounce.
Bednarik suggested that market participants are unlikely to push the price of gold far from its current level ahead of Wednesday's release of the January Non-Farm Payrolls report. Expectations are for the U.S. economy to have added 70,000 new jobs in January, with the unemployment rate forecast to remain unchanged at 4.4%. Following the employment data, U.S. inflation figures are scheduled for release on Friday. Both reports are considered crucial for the Federal Reserve's policy decisions.
Analysis of Gold's Technical Outlook
Bednarik pointed out that after finding a bottom near $4,400 per ounce in early February, spot gold appears to be resuming its bullish trend. The high formed near $5,092 last week presents immediate resistance. However, a decisive break above this level could pave the way for a gradual recovery towards the historical highs.
On the 4-hour chart, technical indicators have moved lower but remain positioned above their respective midlines. Concurrently, the gold price continues to trade above the bullish 20-period Simple Moving Average (SMA), which is converging with the mildly ascending 100-period SMA near $4,980 per ounce.
Bednarik added that the daily chart shows the gold price remains above all its bullish moving averages. The 20-day SMA maintains a sharp upward slope and is positioned significantly above the 100-day and 200-day SMAs. Technical indicators have edged lower but remain within positive territory. For buyers aiming to retest the record highs, a clear break above $5,092 is now seen as critical.
As of 11:46 Beijing Time, spot gold was trading at $5,060.13 per ounce.