The gold could have a higher high reaching $1279.55 per ounce last Friday, despite the release of US Feb Labor report which painted an optimistic picture of the labor market by adding 242k jobs out the farming sector revising up Jan figure to +172K and Dec figure to +271K.
The report has shown that there was no negative impact yet of the global economic slowdown on the US economy and labor market.
After its meeting on Jan. 27, FOMC said that it is assessing currently the global economic slowdown and the financial development implications for the labor market, the inflation, and for the balance of risks to the outlook.
So, the US treasuries yields could be boosted after last Friday labor data with lower demand for safe haven, higher trust in keeping US equities and also better interest rate outlook.
But the gold was still able to rise up to its highest rate since last year Feb. 3, after shortfall to $1250.06 following these data, as it has not been ready yet to lose much of its upside momentum it gained in the most recent weeks.
It is similar reaction to Jan labor report release which caused forming only a new higher low at $1145.30, before resuming its creeping up.
The gold was one of the most gainers of the lower interest rate outlook in US and the financial turmoil which hit the markets earlier this year because of the oil prices slide and Chinese economic deceleration which dampened the global economic outlook.
While PBOC raised its holdings by 0.9% to 57.18m ounces from 56.66m ounces in December a month earlier to follow Russia which boosted its holding of it by 17% to 45.5m ounces in 2015 to diversify their reserve with pressure on their currencies.
The pressure was not only of rubble and Yuan but also on the currencies of other emerging economies because of the higher interest rate outlook in US which boosted the greenback across the broad.
Technically, the gold has formed series of higher lows, after it had been exposed to correction to dive to $1190.63 but the existence below $1200 looked a good chance to the bargain hunter to reload the gold.
The gold could have another positive sign last week by surpassing its previous high at $1263.14 which has been reached on last Feb. 11, after containing its full falling from $1191.58 to $1046.08.
The gold is now above its daily Parabolic SAR (step 0.02, maximum 0.2) for the third consecutive day, after surpassing $1263.14 reading today $1195.67.
XAUUSD daily RSI-14 is referring now to existence in the neutral region but close to its overbought region above 70 reading now 68.389 and also its daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line in the neutral region at 74.653 close to its overbought area above 80 and also its signal line which is reading now 76.225.
The gold upside momentum rose significantly by getting over its daily SMA200 with crossing $1130, after surpassing its daily SMA100 and its daily SMA50.
Important levels: Daily SMA50 @ $1053.73, Daily SMA100 @ $1124.96 and Daily SMA200 @ $1133.06
S&R:
S1: $1250.06
S2: $1224.52
S3: $1210.72
R1: $1279.55
R2: $1285.32
R3: $1307.05
Have a good day
Kind Regards
Global Market Strategist
Walid Salah El Din
Mob: +20 12 2465 9143
E-Mail: mail@fx-recommends.com