Gold futures rose for the third consecutive day on Friday, finishing higher six of the last seven weeks, after mixed economic data. US non-farm payrolls were well below estimates. Analysts were looking for 184K jobs added in January, and the unadvised print came in at 113K jobs. Equities had a melt-up, but there were some odd signals in the markets, both gold (and silver), and treasuries went higher. This potentially indicates investors are not truly convinced the economic data is strong enough to carry the markets throughout the short- to mid-term.
Gold, on the weekly chart, is at a very interesting key area after closing at $1,266.80 per ounce. A five-year weekly chart shows gold’s downward momentum is decline. The -DMI is declining, but so is the +DMI which could indicate a range in gold prices. However, it is very likely that these two indicators will meet in a bullish crossover if gold continues to see safe-haven demand. The weekly RSI is encouraging for gold bulls as it ticks higher to 45.
Weekly gold prices have remained higher after breaking a short-term descending trend line created on August 8. Key historical supports lie at $1,179 and $1,216 (where the descending trend line meets with price action). Gold has seen a futures demand between the recent lows of $1,179 and $1,186, where price has ventured and been bought each time.
The five-year Fibonacci retracement to the all-time highs of $1,923.7 shows that gold prices are at an interesting level, slightly below the 38.2 level or $1,269 per ounce. This level and the 20 EMA are acting as resistance, but the mixed data and corporate earnings, coupled with international strife, could cause gold to break these levels.
If so, gold has the ability to see $1,328 per ounce and potentially having the moment to hitting the low-to-high midway point of $1,394 per ounce. However, if the hopium of market participants remain elevated, as they pick and choose what data they like, gold could remain range bound.
Gold has broken resistance at $1,265, and at least $1,300 is within reach in the coming weeks.