Could Gold Price Become This Weekend’s Surprise?

At the time of writing, gold is trading at $1711.40 versus the previous closing price at $1696. Although gold was relieved by $20 rally after the key US jobs data, traders opt to stay cautious because of the generally negative macroeconomic data as well as the current gold’s dangerous technical levels that could drag it lower next week.

A strong US dollar and rising yields forced gold below $1,700 an ounce earlier this week. Gold is turning into a punching bag because soaring Treasury yields have entrenched the US dollar’s stance.

December Comex gold is looking to close Friday at around $1,727.20 per ounce, down 2.5% on the week, following a rally on the back of August’s jobs report.

Friday’s move might prove to be only as a short covering rally. The market has been trending lower. Earlier in 2022, gold failed to hold above $1,800. The $1,700 level is the bottom.

The 315,000 increase in US nonfarm payrolls and the uptick in the unemployment rate to 3.7% point to a smaller 50-basis-point rate hike versus the 75-basis-point increase expected by the markets.