Gold Intraday: Upside Potential Likely to be Limited

The Fed is likely to maintain a cautious view on the economic outlook later today, however the resilience of labour market should be acknowledged...

Gold 1

Spot gold climbed 1.0% on day to $1,715 yesterday, extending its rebound for a second straight session after a surprising growth in U.S. jobs reported last Friday. We stick to our view that gold is due for a deeper price correction in the short term, as the latest jobs report suggested that economic recovery is ongoing.

The U.S. Federal Reserve will release its monetary statement later today, even though it is likely to maintain a cautious view on the economic outlook, the resilience of labour market should be acknowledged.

From a technical point of view, the upside potential for spot gold appears to be limited as shown on the 1-hour chart. Currently, it is trading within a bearish channel drawn from May 18, and is approaching the upper boundary of the channel. Bearish investors might consider $1,730 as the nearest resistance, which is also the 61.8% Fibonacci retracement of the recent decline. Below this level, prices are likely to retreat to test the 1st and 2nd support at $1,700 and $1,689 respectively. Alternatively, bullish investors may wait to see a clear break through from $1,730, which would trigger a further rebound to test the next resistances at $1,745 and $1,754.

Source: TradingView, Gain Capital

More from Gold


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.