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Gold about to let slip weekly gain

Spot gold’s attempt to carve out a weekly gain is on the cusp of being foiled by the US dollar’s recovery heading into the weekend.

Gold has been suppressed by its 21-day simple moving average (SMA) this week, and remains mired in the downtrend that’s persisted since March.

Gold about to let slip weekly gain

Gold’s ability to break out of this downtrend is highly contingent on whether the “dovish pivot” narrative is validated by the incoming US economic data and by the Fed’s policy clues.

Should next Friday’s US jobs report prove resilient once more, paving the way for the Fed to continue lifting rates beyond the expected 4.8% peak, that should send a shudder through gold bulls.

If the Fed signals next week that it’s still far from done in its ongoing battle against red-hot inflation, that should translate into a stronger ceiling above spot gold.

Until there are meaningful signs that the peak for US interest rates is truly nigh, spot gold is unlikely to see a sustained recovery in the interim.

 

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