The price of gold jumped on Wednesday (up 2.2% until the start of the US session) after another failure at a strong support at $4,000 (the metal failed to register a clear break below this level in six consecutive attempts).
Weaker-than-expected US private sector employment data for June and comments by Fed Chairman Warsh that inflation risks have eased have lifted metal prices.
Fresh strength has broken through the $4,100 area, the ceiling of near-term congestion (reinforced by a decline in the 10DMA), with a sustained break needed here to generate an initial positive signal and start reviving bulls for a potentially stronger recovery.
Supportive fundamentals (markets await June Nonfarm Payrolls report on Thursday) remain at odds with the prevailing bearish structure on the daily chart (14-day momentum remains in negative territory/moving averages in a bearish formation, with the latest bearish cross formation of 55/200DMA) continuing to provide a headwind to recovery attempts.
Another failure to cross pivot points at the $4,100 area would keep the price within the range, despite a bullish bias while holding at the top of the range, as studies on the 1-hour and 4-hour charts improved).
All eyes are on June labor data, with disappointing non-farm payrolls data set to further weigh on the recovery, while better-than-expected numbers will add to the emergence of positive signs of a stronger rebound.
Accuracy: 4115; 4184; 4200; 4268
sip: 4023; 4000; 3960; 3942
