Gold surpasses $1850 after bullish open
Gold prices rebound strongly after weeks of bearish momentum
Declining US Treasury bond yields give gold some support
Wage rates in the US decline on an annual basis.
Economic events that have an impact on the movements of the US dollar
Gold started the week with a significant rise, putting an end to a nine-session losing streak. As US Treasury bond yields were under pressure.
Furthermore, data from the US Department of Labor Statistics revealed that the US economy added around 336,000 jobs, surpassing the previous reading of 227,000 jobs. Unemployment rates remained unchanged at 3.8%, the same as the previous reading.
On the flip side, wage rates experienced a decline on an annual basis, dropping to 4.2% in September compared to the previous reading of 4.3% in August. On a monthly basis, the indicator remained stable at 0.2%.
These data hold significance for the US Federal Reserve in making decisions regarding interest rates in their upcoming meeting. They will need to determine whether to maintain rates at their highest levels in 22 years or raise them further.
Market participants turn to several important economic data releases this week, including key inflation data from the US.
Prices began the session with a gain of over 1%, trading close to the $1853 per ounce level.
Key technical levels that could impact gold movements
After experiencing a decline near the $1810.00 support level, gold quickly rebounded from it. This level served as a sideways support zone and represented the lower boundary of a descending channel. Currently, gold is trading around the $1850.00 level, and there is a likelihood of further upward movement to test the $1870.00 level. If it surpasses that level, it may extend its gains to the $1890.00 level.
The current support level for gold is around $1832 to $1830, and it is important to maintain this level as support in order to confirm the intention to rise. However, if this level is breached, the decline may continue, testing the $1810.00 level once again.