Gold strengthens ahead of the non-farm payrolls release

Gold prices advanced to a fresh three-month high of USD 1160.71 levels ahead of the non-farm payrolls release in the US, which is expected to show job growth slowed in January.

Trades above 61.8% Fibo level

Prices are trading above USD 1157.23 (61.8% of Oct high-Dec low). But, whether the prices extends gains above the Fibo level or falls back depends on the payrolls number. A point worth noting is the yellow metal looks overbought on intraday technical charts after having rallied almost $90 since mid-January.

This makes it more vulnerable to a better-than-expected NFP figure. As of now, the prices are trading around USD 1159/Oz levels.

Gold Technical Levels

A break above the immediate resistance at 1169.99 (Aug 25 high), above which the prices could have a go at a major hurdle at 1183 (Oct 28 high). On the other hand, a break below hourly 50-MA at 1144.51 could see prices drop to 1136.00 (61.8% of Oct high-Dec low).

Feb 5, 2016

USD: Whether to buy or a sell? - Rabobank

Jane Foley, Research Analyst at Rabobank, suggests that investors are hoping that this afternoon’s release of the US January labour report will shine light on the debate over whether the Federal Reserve jumped the gun by hiking interest rates in December.

China’s foreign reserves to touch record low in Jan on PBoC intervention

Official data on China’s foreign-exchange reserves data will be released on Sunday and it is very likely that China will post a record drop for the second consecutive month on account of the central bank intervention to support the falling yuan. China’s foreign reserves are currently at a three-year low. A Bloomberg survey of economists showed foreign reserves likely fell by $118 billion to $3.2 trillion in January, higher than the record $108 billion decline seen in December. Jian Chang, chief China economist at Barclays Plc in Hong Kong, estimates a drop of $140 billion while Commerzbank AG’s Zhou Hao and two others estimate an $80 billion reduction.