GOLD Analysis
Afternoon: Gold Market Rally: Mixed Employment Data and Trade Policy Uncertainty Drive Buy Signal
Highlights:
- Gold traded at $2,910 amid weaker-than-expected job creation and rising unemployment.
- Safe-haven demand is supported by altered global trade policies and geopolitical tensions.
- Buy on drop around $2,904, targeting $2,925 with a stop loss below $2,890.
Overview:
Gold prices reached $2,910 as investors reacted to a mixed bag of employment data. The latest nonfarm payroll report indicated that the US economy added 151,000 jobs in February—short of the anticipated 160,000—raising concerns about the pace of economic recovery. In addition, the unemployment rate unexpectedly climbed to 4.1%, signaling potential underlying weaknesses in the labor market despite an increase in pay growth to 4%. Further complicating the employment picture, layoffs surged to levels not seen since 2020, although there was a notable decline in jobless claims last week, suggesting some relief at the margins.
The precious metal's safe-haven appeal is being reinforced amid uncertainty surrounding global trade policies. While President Donald Trump postponed the implementation of 25% tariffs on most Canadian and Mexican exports, retaliatory measures from Canada remain active, and China’s tariffs are set to take effect next week. This evolving trade policy landscape is adding volatility to the markets and enhancing gold’s attractiveness as a defensive asset.
Looking ahead, market sentiment is optimistic, with gold expected to appreciate by approximately 1.8% this week. Technical levels provide further guidance: gold has support at $2,885 and resistance at $2,935 in the US market, while on the MCX, support is at 85,400 and resistance at 86,400.
Trade Recommendation:
Given the current market dynamics, the recommended action is to buy on a drop around $2,904, with a target of $2,925 and a stop loss placed below $2,890. Traders should also closely monitor upcoming key economic indicators, including the German Industrial Production (m/m), German Trade Balance, and the Sentix Investor Confidence from the Euro Zone, as these will provide further insights into the broader economic environment and gold’s trajectory.
Support and Resistance Levels:
