Gold plunged broadly and broke the key $1100 support area after the release of unexpected Nonfarm Payrolls. The technical bias has turned bearish because of a Lower Low in the ongoing wave. The yellow metal printed 8th consecutive intraday loss on Friday, making it the worst losing streak of the ongoing year.
Technical Analysis
As of this writing, the precious metal is being traded around $1093.00 an ounce. A support may be noted near $1085, the intraday low of Friday ahead of $1071, the swing low of the last major dip on daily chart and then $1050, the psychological number.
On the upside, the precious metal is likely to face a hurdle near $1100, the psychological level ahead of $1110, the intraday high of Friday and then $1116, the 61.8% fib level.
Nonfarm Payrolls
Job growth surged in October, rebounding from a late-summer slowdown that raised concerns about whether global slowness was infecting the U.S.
The Bureau of Labor Statistics reported Friday that nonfarm payrolls grew 271,000 for the month, a sharp jump from weak August and September numbers. The headline unemployment rate declined to 5.0 percent, declining even as the civilian labor force increased by 313,000. A broader measure of unemployment that includes those who have stopped looking as well as those working part time for economic reasons declined to 9.8 percent, the first time it’s been below 10 percent since May 2008.
Perhaps more important than the headline number was the growth in average hourly earnings, which jumped 9 cents, representing a monthly gain of 0.6 percent and an annualized increase of 2.5 percent. The average work week remained at 34.5 hours.
Trade Idea
Considering the overall technical and fundamental outlook, buying the precious metal around current levels could be a good strategy in short to medium term if we get a valid bullish reversal candle such as bullish pin bar or bullish engulfing candle.
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