The price of gold extended downside movement on Monday, dragging the price of yellow metal to less than $1229 following the nonfarm payrolls release on Friday. The technical bias remains bullish in the short term because of a Higher Low in the recent downside move on the four-hour timeframe.
Technical Analysis
As of this writing, the precious metal is being traded near $1218. A support may be noted around $1208, the swing low of the recent downside wave as well as intraday low of Friday ahead of $1200, the confluence of psychological number as well as horizontal support.
On the upside, the yellow metal is likely to face a hurdle near $1226, the horizontal resistance area ahead of $1232, the channel resistance and then $1244, the swing high of the last major upside rally as demonstrated in the above chart.
US Job Data
Nonfarm payrolls increased by 215,000 in March, providing a positive sign for an economy that otherwise has been slowing lately. The jobs growth came as the headline unemployment rate rose to 5.0 percent, the first month-over-month increase since May 2015. The level of unemployed Americans considered part of the workforce rose to 7.97 million, from 7.82 million in February. A separate measure of unemployment that includes those not looking for work as well as those working part-time for economic reasons also rose one-tenth to 9.8 percent. Economists surveyed by Reuters were expecting nonfarm payrolls to show growth of 205,000 for March, down from the initially reported 242,000, and the unemployment rate to hold steady at 4.9 percent.
Trade Idea
Considering the overall technical and fundamental outlook, buying the precious metal on dips appears to be a good strategy in short term.
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