Gold price edged lower at the start of a new trading week and eroded a part of Friday's strong upsurge beyond the key $1300 psychological mark.
January 28, GKFX – Despite a deal to reopen the US government after a prolonged shutdown, dovish Fed expectations triggered a broad-based US Dollar selloff and prompted some aggressive short-covering rally around the dollar-denominated commodity, lifting it to over six-month tops.
News reports on Friday indicated that the Fed is considering to stop shrinking its massive balance sheet earlier than anticipated and fueled market expectations that the central bank will signal a pause in the tightening cycle when it concludes a two-day policy meeting on Wednesday.
The USD selling pressure now seems to have abated, which coupled with optimism over a possible resolution to disputes between the world's two largest economies, ahead of the upcoming trade talks this week, kept a lid on any strong follow-through momentum on Monday.
Apart from this, the keenly watched US monthly jobs report, popularly known as NFP, scheduled for release on Friday, will further contribute towards providing a meaningful impetus and help determine the next leg of a directional move for the commodity.
Gold Price technical forecast
Any subsequent profit-taking slide is likely to find immediate support near the $1300 handle and is closely followed by the $1297-96 region, which if broken might prompt some more weakness back towards the $1287-86 horizontal zone.
On the flip side, $1307 level now seems to act as an immediate hurdle, above which the commodity seems all set to continue with its bullish trajectory and aim towards testing its next barrier near the $1324-25 region with some intermediate resistance near the $1313-14 area.
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