The price of gold dropped on Monday and Tuesday, but bulls managed to defend the critical 200 day moving average, along with the psychological level of 1,300 USD and pushed the bullion 0.50% higher on Wednesday. It was trading around 1,312 USD during the London session.
Tuesday’s US data came weaker than expected, with the ISM manufacturing index easing to 57.3 from 59.3, but the subindex of prices paid jumped to fresh cycle highs of 79.3. This has failed to boost the bullion.
Investors will turn their attention to the ADP employment report, which is due later in the day. The US economy is expected to create 200,000 jobs in April, down from 241,000 in March.
Furthermore, the two day FOMC meeting concludes today and markets are positioned for no change in monetary policy today. However, a slightly more hawkish statement is expected, due to rising inflation figures in the previous weeks.
The main support is now at the 200 day moving average around 1,305 USD and afterward at 1,300 USD. If the price drops below, the bearish trend could be renewed, targeting 1,280 USD.
On the other hand, the first resistance is at 1,320 USD and if not held, further rise to 1,326 could occur. In all cases we strongly recommend to have rigorous money and risk management.
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