Gold price is struggling to find bids despite the US NFP report for March came in worse than expected. As of this writing, XAUUSD is trading below yesterday’s highs at $1,617.06.
According to the Bureau of Labor Statistics, the Non-Farm Employment Change report for March declined by 701,000. This was worse than the 100,000 job loss that analysts had anticipated. Consequently, the lay-offs brought about by the coronavirus pandemic has led to an uptick in the unemployment rate. It is now at 4.4% from February which was at 3.5%. A more modest uptick had been anticipated at 3.8%.
The only bright spot in the US jobs report was the 0.4% uptick in average hourly earnings. This, however, is not enough to ease concerns about another recession in the US. Interestingly, XAUUSD is not rallying. In the past, disappointing US data or concerns about global growth were bullish for gold price. Today’s report did not garner the same reaction from market participants.
It is worth pointing out that consolidations often mean that a breakout is imminent. On the 1-hour time frame, it can be seen that XAUUSD has been trading in a tight range. As of this writing, gold price has found support at the 200 SMA around 1,605.56. A close below this level could mean that there are enough sellers in the market to push gold price lower, possibly to this week’s lows at $1,571.60.
On the other hand, a bullish close above the minor resistance at yesterday’s high could trigger a rally on gold price. The key level to watch out for is $1,620.47. If it breaks, the next near-term resistance will be at $1,644.48 where XAUUSD topped on March 26.