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Gold Price Settles Above $2,000 For The First Time

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Aayush Jindal

Key Highlights

  • Gold price rallied above the $2,000 resistance for the first time ever.
  • A new all-time high is formed near $2,075 the price is currently correcting lower.
  • The US Nonfarm Payrolls increased 1,763K in July 2020.
  • The US Unemployment rate declined from 11.1% to 10.2% in July 2020.

Gold Price Technical Analysis

After consolidating for a few days, gold price finally surged above the $2,000 level against the US Dollar. The price traded to a new all-time high close to $2,075 and it is currently correcting lower.

The 4-hours chart of XAU/USD indicates that the price broke an important hurdle near $1,980 level to surge above $2,000 for the first ever. The price traded close to the $2,075 level, and settled well above the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

The current technical structure is positive and it seems like the price might continue to rise towards $2,100 in the near term. If there is a downside correction, the price might find support near the $2,020 level.

The main support is now forming near a connecting bullish trend line on the same chart and the $2,000 level. Any further losses could lead the price towards the crucial $1,980 level (the recent breakout zone).

Fundamentally, the US nonfarm payrolls report for July 2020 released this past Friday by the US Bureau of Labor Statistics. The market was looking for an improvement in jobs by 1,600K.

The actual result was positive, as the US nonfarm payrolls rose 1,763K in July 2020. The last reading was revised down from 4,800K to 4,791K. Moreover, the US Unemployment rate declined from 11.1% to 10.2% in July 2020.

The report added:

The number of unemployed persons fell by 1.4 million to 16.3 million. Despite declines over the past 3 months, these measures are up by 6.7 percentage points and 10.6 million, respectively, since February.

Overall, gold price is trading in a strong uptrend above the $2,000 level. Looking at EUR/USD and GBP/USD, both started a short-term downside correction.

Economic Releases to Watch Today

  • Euro Zone Sentix Investor Confidence August 2020 - Forecast -15.2, versus -18.2 previous.
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