Gold Regains Footing Above $1,770 as Markets Brace for NFP Data ReleaseH

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Gold (XAU/USD) bulls are witnessing some fresh bullish momentum in the early European session after yesterday’s slump. This momentum is largely supported by the risk-on bias in the European equities market that exacerbated the selling pressure on the US dollar.

The safe-haven appeal for the dollar was eroded as investors took-flight from higher-yielding/risky assets. This, consequently, helped gold recover from yesterday’s slump.

The non-yielding commodity recorded a three-day low, shedding about $30 from its 8-year highs of $1,789 despite a weak US dollar demand. The yellow metal slumped after a better-than-expected US Manufacturing PMI data was released and promising Coronavirus vaccine trial results from Pfizer and BioNtech re-stoked optimism for a sharp economic recovery.

Moving on, the US NFP release will be taking center stage in today’s market affairs. Market participants expect the NFP report to be negative, however, a better-than-expected report (above +3000K) could send gold on a steeper corrective slide.

Gold (XAU) Value Forecast — July 2

XAU/USD Major Bias: Bullish

Supply Levels: $1,779, $1,790, and $1,800

Demand Levels: $1,765, $1,758, and $1,745

Gold has been trading well above our projected trendline and we are slowly reaching a “triangle-end” which could cause the price to either rise or drop sharply. However, a drop is unlikely considering the overall bias and market risk-tone. Also, an upward move is more likely given that it is the “path of least resistance.” That said, we might see the $1,779 mark soon.

Meanwhile, today’s price action will largely be controlled by the impending NFP data release and technical setups will likely be ignored considering the market influence of this data release.

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