Jump to content

Gold Price Forecast: RSI Sell Signal Emerges Ahead of US NFP Report


MongiIG

Recommended Posts

GOLD PRICE TALKING POINTS

The price of gold struggles to extend the series of higher highs and lows from earlier this week as Federal Reserve Chairman Jerome Powell prepares US lawmakers for a material shift in monetary policy, and recent developments in the Relative Strength Index (RSI) indicate a larger pullback for bullion as the oscillator falls back from overbought territory to indicate a textbook sell signal.

Gold Price Forecast: RSI Sell Signal Emerges Ahead of US NFP Report

GOLD PRICE FORECAST: RSI SELL SIGNAL EMERGES AHEAD OF US NFP REPORT

The price of gold appears to be reversing ahead of the February high ($1974) as Chairman Powell insists that “it will be appropriate to raise the target range for the federal funds rate at our meeting later this month,” and the upcoming shift in Fed policy may drag on bullion as market participants brace for higher US interest rates.

The comments suggest the Federal Open Market Committee (FOMC) will layout a more detailed exit strategy as Chairman Powell pledges to “proceed in a predictable manner” when normalizing monetary policy, and it remains to be seen if the Fed officials will project a steeper path for the Federal Funds rate as the central bank is slated to release the updated Summary of Economic Projections (SEP) at the next interest rate decision on March 16.

Image of DailyFX Economic Calendar for US

Until then, developments coming out of the US along with swings in investor confidence may influence the price of gold as the Non-Farm Payrolls (NFP) report is anticipated to show a further improvement in the labor market, with the economy expected to add 400K jobs in February.

Another uptick in US employment may generate a bearish reaction in the price of gold as it puts pressure on the FOMC to adjust its exit strategy, and the precious metal may face a larger correction over the coming days as it struggles to extend the series of higher highs and lows from earlier this week.

With that said, the near-term rally in the price of gold points to a potential shift in the broader trend as it clears the 2021 high ($1959), but recent developments in the Relative Strength Index (RSI) indicate a larger pullback for bullion as the oscillator falls back from overbought territory to indicate a textbook sell signal.

GOLD PRICE DAILY CHART

Image of Gold price daily chart

Source: Trading View

  • The broader outlook for the price of gold has become bullish as it cleared the opening range for 2022 in February, with bullion taking out the 2021 high ($1959) as the Relative Strength Index (RSI) climbed above 70 for the first time this year.
  • However, the price of gold appears to be reversing ahead of the February high ($1974) as it struggles to extend the series of higher highs and lows from earlier this week, with the RSI highlighting a similar dynamic as the oscillator falls below 70 to indicate a textbook sell signal.
  • Lack of momentum to hold above the Fibonacci overlap around $1916 (38.2% expansion) to $1929 (23.6% retracement) may push the price of gold back towards the $1876 (50% retracement) region, with a break/close below the $1859 (23.6% retracement) area opening up the $1837 (38.2% retracement) to $1847 (100% expansion) zone.

 

Written by David Song, Currency Strategist. DailyFX 3rd March 2022

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • In the wake of a brewing conflict between the Nigerian government and Binance, cryptocurrency enthusiasts find themselves on edge, uncertain about the future of their digital investments. Rumors abound that Binance, along with other platforms, might be exacerbating the Naira's devaluation against the dollar, prompting the government to take a hard stance against the exchange. Despite longstanding allegations of wrongdoing, recent events have propelled the government to escalate its actions. The situation has escalated dramatically, with Binance's P2P platform disabled and a staggering $10 billion fine imposed for alleged illegal activities. This punitive measure, coupled with last year's $4.3 billion fine by the SEC, underscores the gravity of the situation. However, skepticism lingers regarding the astronomical sum demanded by the Nigerian government. While Binance has faced regulatory challenges in other jurisdictions, its resilience and market dominance have largely endured. Yet, the potential ramifications of losing access to a key crypto market like Nigeria cannot be ignored. Complicating matters further, the Nigerian House of Representatives has summoned Binance CEO Richard Teng, issuing a seven-day ultimatum for him to address allegations of terrorist financing and money laundering, among other charges. This development casts a shadow over the future prospects of Binance in the country. Amidst the uncertainty surrounding Binance's operations in Nigeria, users are scrambling to identify alternative platforms. While other centralized exchanges (CEX) remain operational within the country, the pressing question remains: which platform will emerge as the most dependable alternative should the situation worsen? https://punchng.com/reps-summon-binance-boss-over-alleged-terrorism-financing/
    • 2024 has been a good year for crypto traders with signs of a bullish market prevailing. For the first time in 3 years, we are witnessing BTC set a new ATH repeatedly. If you endured the prolonged bear market of the previous years, you deserve these gigantic green candles! In addition to BTC's incredible run, several alts have broken out nicely; Ai, memecoin, GameFi projects and so on have spiked. Most notably in the month of February is the run of CEX tokens. According to Foresight News, centralized exchange tokens boast of a widespread price spike in February, based on data from ICO Analytics. Standing tall amongst many is BGB with 62% increase, while ASD, BNB, and KCS witnessed gains of 45%, 33%, and 22% respectively. As a BGB holder myself who’s been holding since June 2023 at an average price of $0.45, it’s been an incredible journey. I’ve witnessed it smash its ATH over again, the latest coming in February when BGB set a new ATH of $1.15. Aside the juicy ROI, BGB usecases have been a flex for me, granting me access to exclusive events, like Launchpads where I’ve also managed mouth-watering gains from my participations. BNB had a remarkable run in the last bull cycle, sadly I missed out having sold mine for peanuts. If you said I’m stoked to right my wrong with BGB this time, you wouldn’t be far from the truth!  Which CEX token(s) are you keenly observing?
    • Look at the transaction log to see why, Most of the time it's because your stop loss is set too close. 
×
×
  • Create New...
us