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  • Gold edged higher on Friday, albeit lacked any strong follow-through buying interest.
  • A modest rebound in the US equity futures, positive US bond yields capped the upside.
  • Investors also seemed reluctant to place any aggressive bets ahead of the US jobs data.

Gold traded with a mild positive bias through the early European session, albeit lacked any strong follow-through and remained below the $1940 level.

A sharp fall in the US equity markets on Thursday extended underpinned the precious metal’s safe-haven demand. This coupled with the emergence of some fresh selling around the US dollar extended some additional support to the dollar-denominated commodity and assisted bulls to defend a three-month-old ascending trendline support.

The metal managed to gain some positive traction on the last trading day of the week, albeit a combination of factors kept a lid on any meaningful appreciating move. A modest bounce in the US equity futures, along with a goodish pickup in the US Treasury bond yields capped the upside for the non-yielding yellow metal.

Investors also seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of the closely watched US monthly employment details. The NFP report might influence the market expectations about the next policy move by the Fed and help investors to determine the commodity’s near-term trajectory.

Given that the Fed’s recent move to prioritize employment over inflation, a disappointing reading should provide a strong boost to the yellow metal. Meanwhile, a stronger than expected reading might still not be enough to clear the uncertainty about the US economic recovery. This makes it prudent to wait for a convincing break through the mentioned trend-line support before positioning for any further near-term depreciating move.

Technical levels to watch

 

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