Gold price fell sharply on Thursday, after US ADP private payrolls rose way above expectations in June (497K vs 228K f/c and downwardly revised May figure from 278K to 267K).
Upbeat data point to strong labor market, despite growing fears of recession, due to high borrowing cost and improve the overall sentiment, prompting traders into riskier assets, which lifted the dollar index
The yellow metal was down over $20 immediately after release of US ADP report and cracked the upper boundary of strong support zone between $1902 and $1892 (Fibo 38.2% of $1614/$2080 / psychological / June 29 spike low).
Sustained break through $1900 support zone would generate strong bearish signal for continuation of larger downtrend, paused for a mild correction during the past week and expose targets at $1863/$1847 (200DMA (Fibo 50% of $1614/$2080).
Weak technical picture on daily chart (14-momentum in negative territory / most of MA’s in bearish configuration) add to bearish near-term outlook, though strong headwinds are still to be expected at $1900 zone.
Near-term action needs to stay below 10DMA ($1916) to keep fresh bears in play and guard upper pivots at $1930/34 (falling 20DMA / July 5 top).
Traders will wait for Friday’s release of US non-farm payrolls data for June, to get more details about the condition of US labor market.
Res: 1916; 1930; 1934; 1946.
Sup: 1900; 1892; 1871; 1863.
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