Gold futures were slightly higher late Friday after recovering from early losses. The move was driven by an intraday breakout in the dollar as traders sold safe-haven positions following the release of stronger-than-expected labor market data in the United States.
Still, gold is set to fall more than 3% this week as traders continue to bet on a series of aggressive interest rate hikes by the Federal Reserve.
At 19:00 GMT, August Comex gold futures were trading at $1740.30, up $0.60 or +0.03%. The SPDR Gold Shares ETF (GLD) was up $0.10 or +0.06% at $162.33.
In economic news, the Labor Department reported that nonfarm payrolls rose by 372,000 in June, following a revised surge of 384,000 jobs in May. Economists were looking for an increase of 260,000.
The unemployment rate was unchanged at 3.6%, in line with expectations. Average hourly earnings rose 0.3%, in line with expectations, after being revised upward to 0.4% last month.
Short-term outlook
Traders’ reaction to $1,739.70 could determine how the August Comex gold futures contract moves at Friday’s close.
Bullish scenario
A sustained move above $1,739.70 would indicate the presence of buyers. A close above that level would create a potential bullish closing reversal bottom. If confirmed on Monday, this could trigger a 2- to 3-day countertrend rally.
Bearish scenario
A sustained decline below $1739.70 would indicate the presence of sellers. This could trigger a late-day decline to the intraday low of $1726.00. A break below this level could trigger an acceleration to the downside, with the next major target being the major bottom at $1694.90 on March 8, 2021.