Gold sellers need validation from $1,685 and US NFP
Gold retreats towards $1,710 while fading the upside break of a seven-month-old resistance. In doing so, the yellow metal stays inside the bearish trend channel connecting levels marked since late April. That said, the latest pullback remains elusive until the quote remains beyond the aforementioned previous resistance line, around $1,685 at the latest. Following that, July’s low near $1,680 and the $1,650 level may probe the bears before directing them to the yearly bottom surrounding $1,615. It should be noted, however, that the bullion’s weakness past $1,615 will be by challenged the stated channel’s lower line, close to $1,608, quickly followed by the $1,600 round figure.
Meanwhile, an upside clearance of the stated channel’s top-line, close to $1,742, could quickly propel the gold prices toward the $1,800 threshold. However, August month’s peak near $1,807 and the 200-DMA near $1,822 appear tough nuts to crack for the metal buyers afterward. In a case where the bullion remains firmer past $1,822, June’s peak of $1,878 and March’s trough close to $1,890 could lure the bulls.
Overall, gold prices are likely to pare the recent gains considering the upbeat expectations from the US employment numbers. However, a clear downside break of $1,685 and the market’s reaction to the actual data should be watched carefully before jumping on the bear’s boat.
