Friday’s payrolls report gave a jolt to gold prices which enjoyed a stellar rally last week. The gains came about as investors now expect the Fed to cut rates this year. While there has been speculation about the rate cuts, this view gains traction in light of the recent weakness in the labor market. Gold prices tested highs of 1348 on Friday before retreating modestly lower by Friday’s close.
Will Gold Advance Higher?
The recent gains in gold prices have been sharp and rapid. There is scope that price could correct in the near term. The initial support is seen at the 1320 handle which could offer support in case of a correction. However, for this to happen, the current momentum needs to slow. Watch for potential divergences near the current highs which could signal a possible dip to the 1320 level in the near term.
