Gold inched lower on Monday, decreasing the price of the yellow metal to less than $1260.00 an ounce following some key economic releases. The technical bias remains bearish because of a lower low in the ongoing downside move.
XAU/USD Technical Analysis
As of this writing, the precious metal is being traded near $1256 an ounce. On the downside, a support may be noted around $1205, an immediate horizontal support ahead of $1200, a key horizontal support as well as psychological number and then $1180, another major horizontal support area.
On the upside, a hurdle can be noted near $1295, the high of the last major upside rally ahead of $1300, the psychological level as demonstrated with red color in the given below chart. A break and daily closing above the red mark shall trigger renewed buying interest, validating a rally towards the $1340 resistance zone. The technical bias shall remain bearish as long as the $1200 support area is intact.
US Nonfarm Payrolls
Job creation increased in July with 209,000 new positions created, while the unemployment rate held steady at 4.3 percent, according to Labor Department data released Friday. Economists surveyed by Reuters expected nonfarm payrolls to grow by 183,000 jobs last month after they soared to 222,000 in June. Average hourly earnings edged upward to 4.3 percent while private sector payrolls added 205,000 jobs and the labor force participation rate ticked slightly upward to 62.9 percent. The largest job gains were seen in the food and drink services, professional and business services, and healthcare sectors. There were also increases in manufacturing and construction employment.
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.
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