Baxia Markets
June 07, 2024

Gold Price Stumbles After Asian Highs, Key Data and Technical Levels in Focus

market analysis header image

The gold market (XAUUSD) experienced a whipsaw session. After reaching a weekly high during the Asian trading session, prices plunged over 200 pips as London trading opened. This sudden drop raises questions about the near-term direction of gold.


Key Economic Data Looms

Today's market is dominated by crucial economic news releases from major economies, including the UK, Eurozone, US, and Canada. The most impactful release will be the US Non-Farm Payrolls (NFP) report, along with Average Hourly Earnings and Unemployment Rate data. Economists predict improvement in NFP and average hourly earnings, but no change in the 3.9% unemployment rate. Mixed data from the US could significantly impact gold prices against the USD.image-png-Jun-07-2024-08-47-21-8564-AM


Technical Analysis: Bullish Bias Challenged

On the 1-hour chart, a clear uptrend line emerged after a recent breakout above the Ichimoku cloud. However, the appearance of a bearish engulfing candlestick pattern during the London session suggests a potential reversal. While the breakdown below the trendline is a bearish sign, the overall trend remains bullish on the higher time frames as indicated by the EMA 50 and 200 (with 50 above 200). The Ichimoku cloud also maintains a bullish bias with the Chikou Span, Kijun Sen, and Tenkan Sen positioned above the cloud.


Key Levels to Watch

  • Resistance: $2395
  • Support: $2344, EMA 200, Ichimoku cloud

Oscillators Signal Potential Weakness

The Relative Strength Index (RSI) dipped below 40, indicating that the market may be entering a bearish zone. While the MACD's signal line remains above zero, a bearish reversal confirmation would require a price break below the Ichimoku cloud along with the Kijun Sen, Tenkan Sen, and Chikou Span falling below the cloud. Alternatively, a bearish death cross could occur if the EMA 50 falls below the EMA 200.


The market awaits the US economic data for further direction. A strong NFP report could strengthen the USD and put downward pressure on gold prices. Conversely, weaker-than-expected data could trigger a rally. Traders should closely monitor price action around the key support and resistance levels mentioned above. Confirmation of a bearish reversal through Ichimoku cloud breakdown or an EMA death cross would favor short positions. Conversely, a break above resistance at $2395 could signal a continuation of the uptrend.


Key Economic Releases to Watch Today

GBP, Halifax House Price Index 

Actual 1.5% vs Forecast 1.2% vs Previous 1.1%

GBP,  Halifax House Price Index (MoM) 

Actual-0.1% vs Forecast 0.3% vs Previous 0.1%

EUR, German Industrial Production

Actual-0.1% vs Forecast0.1% vs Previous -0.4%

EUR, German Trade Balance

Actual 22.1B vs Forecast 22.6B vs Previous 22.2B


Forecast 0.3% vs Previous 0.0%    


Forecast 0.4% vs Previous 0.1%

USD, Average Hourly Earnings

Forecast 0.3% vs Previous 0.2%

USD,  Nonfarm Payrolls

Forecast 182K vs Previous 175K

USD, Unemployment Rate

Forecast 3.9% vs Previous 3.9%




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