Gold price edges higher early Wednesday, bouncing off the floor of near term range and remaining without clear direction as markets await fresh signals from key economic events this week.
Conflicting technical indicators on daily chart contribute to near term sideways mode, though slight bullish bias to persist as long as the price stays above the top of thick daily Ichimoku cloud ($2324) which contained several attacks in past two weeks, marking significant support.
On the other hand, the price is weighed down by negative 14-d momentum and Tenkan/Kijun-sen bear cross.
US services PMI will be in focus today (f/c 49.4 Apr) and if May figure remains below 50 threshold, it will be positive signal for gold.
A series of reports from the US labor sector commenced with release of JOLTS job openings report on Tuesday (Apr figure dropped well below forecast / previous release and hit the lowest in over two years).
Markets await release of US ADP private sector payroll, due later today (173K f/c vs 192K Apr) and top economic event of the week – US nonfarm payrolls (due on Friday, May 185K f/c vs Apr 175K).
Overall stronger labor data would signal further delay in Fed’s first rate cut (probably to be shifted to November) and generate negative signal for the yellow metal, while signals of weakening US labor sector would add to expectations for the first rate cut in September, which would deflate dollar.
Look for initial direction signals on form break of daily cloud top ($2324 – bearish) od daily Kijun-sen / recent range top ($2363 – bullish).
Res: 2345; 2363; 2382; 2398.
Sup: 2324; 2300; 2272; 2222.
