Gold bugs hope to turn latest bounce into something more

<p>There's one thing that dollar bears and gold bugs have in common at the moment, and that is the call for lower bond yields – which in a sense is this scenario <a href="https://www.forexlive.com/news/dollar-bears-looking-for-that-goldilocks-scenario-on-the-us-economy-20230830/" target="_blank" rel="follow">here</a>. But where gold truly shines is when we start to get to the point of rate cuts and the narrative of higher rates for longer being dead.</p><p>That is the big picture view for gold but that is not the point today. The US jobs report is the main thing to watch and price action in gold is certainly getting interesting with key technical levels coming into play. Here's a look at the daily chart:</p><p>We are running up against the trendline resistance (white line) from the May and July highs at around $1,942.60 and right after that, there is the 100-day moving average (red line) at $1,954.30 currently. Both are marking a key spot for sellers to lean on towards the end of the week and put together, they act as a decent resistance region for buyers to break through.</p><p>The scenario analysis is quite simple. If there is any sign of weakness in the US jobs report later, it will add to the price action that we have seen so far this week i.e. softer dollar and lower bond yields. That should act up as a positive factor for gold.</p><p>But for gold bugs to really get excited, they need to crack the key technical resistance levels above first and foremost. That before thinking about contesting the June and July highs around $1,983-87 and then potentially revisiting the $2,000 mark.</p><p>In any case, I'd mark down win for gold bugs in August trading after turning things around from a break below $1,800 and 200-day moving average (blue line) to where price is now. But there's still more work to do in justifying further upside momentum and a lot of it hinges with bond market sentiment and the Fed outlook in general.</p>

This article was written by Justin Low at www.forexlive.com.