Gold: Precious metal parabolic selloff on ADP
- Gold capped at 1340
- NFP on Friday is the next market mover
Gold is trading lower at 1324 down 0.78% on the day after jumping more than $5 on the news that Cohn, top Trump economic advisor resigned. The news was perceived quite bearish for the economy as a whole. However, the bull breakout was short-lived as 1340 seemed to be a profit-taking area for bulls and an entry point for bears.
Gold daily chart
Gold traded down during the European session and accelerated the downward pressure in the first part of the US Session as the ADP employment report came out above expectation in February suggesting that the Non-Farm Payroll scheduled on Friday at 13.30 GMT could potentially exceed expectation and therefore give the US Dollar a boost. Also on Friday, data from the January industrial production and trade is scheduled, however those numbers will likely be overshadowed by the NFP.
Earlier on Wedensday, the US non-farm productivity came out at 0.0% while it was expected at -0.1%. The trade balance came below expectation at -56.6B vs 55.1B.
In the US session, Gold sold off in a parabolic fashion with RSI numbers well into the oversold territory on the 15-minute chart. While a parabolic move is sometimes a sign of exhaustion, there seems to be little support until we reach the 1320 figure which was the open of yesterday. The next key support is likely all the way down at 1312, S2 pivot point. Resistance is seen at 1326 with S1 pivot point. Further up bulls are eying the 1334 level with the 100 SMA and daily pivot point.
Gold 15-minutes chart
