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James Hyerczyk
Comex Gold

Gold futures are trading higher shortly before the release of the U.S. Non-Farm Payrolls report at 12:30 GMT. Traders are ignoring higher Treasury yields and a slightly better U.S. Dollar, which suggests the early move is being fueled by position-squaring following a steep sell-off earlier in the week.

The pace of rehiring is expected to have slowed in August, and the economy likely added fewer jobs than in July as workers continue to be laid off. There is no guarantee that this report will have any impact on gold prices. It may move Treasury yields and the U.S. Dollar, and that movement may influence gold prices.

Furthermore, another plunge in the stock market could actually drive gold prices lower if investors move money into the safety of the U.S. Dollar.

At 12:21 GMT, December Comex gold is trading $1944.60, up $6.80 or +0.35%.

Daily December Comex Gold

Daily Technical Analysis

The main trend is up, but momentum is trending lower with the formation of a pair of secondary lower tops at $2001.20 and $2024.60. A trade through $1908.40 will change the main trend to down.

On the upside, resistance is a pair of 50% levels at $1954.80 and $1964.20. On the downside, the support is the main 50% level at $1889.70.

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Daily Technical Forecast

Based on the early price action, the direction of the December Comex gold futures contract on Friday is likely to be determined by the uptrending Gann angle at $1942.20.

Bullish Scenario

A sustained move over $1942.20 will indicate the presence of buyers. This could trigger a labored rally with the first two targets $1954.80 and $1964.20.

Overcoming $1964.20 could trigger an acceleration into $1981.70.

Bearish Scenario

A sustained move under $1942.20 will signal the presence of sellers. The first target is $1927.20. Taking out this level could trigger a break into a support cluster formed by the main bottom at $1908.40 and an uptrending Gann angle at $1908.20. Watch for a technical bounce on the first test of this area.

If $1908.20 fails as support then look for the selling to extend into $1889.70.

Side Notes

With the holiday coming up on Monday, we may not see any reaction to the NFP Report. Instead, investors will wait until they return from vacation before reacting to the numbers.

For a look at all of today’s economic events, check out our economic calendar.

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