Gold Price Retreats from 2012 Highs–Is this a Pullback or a Reversal?

Yesterday, gold price rallied to $1,788.88 which is the highest we have seen XAUUSD trade at since 2012. However, the precious metal quickly gave up its gains. By the end of the New York session, XAUUSD was at $1,770.16, down from its opening price at $1,780.00.

As reported by my colleague, Eno Eteng, XAUUSD dropped after the US ISM Manufacturing PMI showed that the industry expanded in June. With that said, we will likely see the direction on gold price be dictated by the outcome of today’s highly-anticipated NFP report.

Due at 1:30 pm GMT, the official US jobs data for June is expected to print at 3.037 million. Meanwhile, the unemployment rate is eyed at 12.4%. The average hourly earnings will also be released and it is eyed to print at -0.8%.

Better-than-expected US labor figures could strengthen the USD and continue to weigh down gold price. On the other hand, disappointing numbers may weaken the currency and push gold price higher.

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Gold Price Outlook

On the 4-hour time frame, it can be seen that the uptrend on gold price is still intact as you can see by the fact that XAUUSD is still trading above the rising trendline (from connecting the lows of June 5, June 18, and June 26). Its current price, around $1,767.90, also coincides with the 50% Fib level when you draw the Fibonacci retracement tool from the low of June 26 to the high of July 1. Reversal candlesticks around this area may mean that buyers could soon push gold price to yesterday’s highs at $1,788.88.

On the other hand, a strong close below this price level may mean that XAUUSD could soon fall to its June 26 low at $1,747.26.

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