Gold Price Forecast: $4,500 Test Sets Stage for NFP

Gold Technical Analysis

The gold market has rallied to reach the $4,500 level. It has pulled back since then, but at this point in time, it looks like we are just simply moving to the beat of the nonfarm payroll announcement. The nonfarm payroll announcement comes out on Friday, and ahead of that, we may have some people paring bets in the forex markets as well as the metal markets.

After all, that announcement could get the markets jumping as traders react to the Kevin Warsh statement that the Federal Reserve is likely to have to stay tight, if not raise rates. This will continue to be a major theme in this market.

Benchmark Payroll Data and Interest Rates

That being said, the jobs report gives a little bit of further guidance because the expected addition of 55,000 jobs is a good benchmark to measure whether or not we are moving towards those rate cuts. If the jobs number comes out hotter than anticipated, it could work against gold as rates will probably continue to grind higher.

Ultimately, this is a nice settling spot between now and that jobs report, so it’s not overly surprising to see gold just kind of bounce around in this area, initially bouncing off of the 200-day EMA early Wednesday, only to test the $4,500 level.

I expect probably a little bit of chop here. Again, it makes sense with that important jobs number the next day. Keep in mind that it is a long weekend in the United States as well, so Monday will be Labor Day. That could affect some liquidity.

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