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Gold inched higher on Monday, increasing the price of yellow metal to more than $1220 an ounce, following the release of US nonfarm payrolls news. The technical bias remains bearish because of a lower low in the recent downside move.
Technical Analysis
As of this writing, the yellow metal is being traded around $1222 an ounce. A hurdle can be noted near $1240.58, the horizontal resistance area ahead of $1275, the trendline resistance zone and then $1300, the psychological number as demonstrated in the given below daily chart.
On the downside, a support can be noted near $1171, the trendline support area ahead of $1150-$1156, the confluence of psychological number as well as horizontal support area and then $1133, the lower trendline support zone. The technical bias shall remain bearish as long as the $1337 resistance area is intact.
US Nonfarm Payrolls
Nonfarm payrolls grew by 227,000 in January while the unemployment rate edged higher to 4.8 percent, the Bureau of Labor Statistics reported Friday. Economists surveyed by Reuters expected payrolls to grow by 175,000, compared with 57,000 in December… There was little wage pressure, however, with average hourly earnings up just 3 cents and 2.5 percent on an annualized basis. The average work week was unchanged at 34.4 hours. The declining wage growth came even though 19 states increased minimum wage laws this month.
Trade Idea
Considering the overall technical and fundamental outlook, selling the precious metal around current levels appears to be a good strategy in short to medium term if we get a valid bearish reversal candle on the daily chart.
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