#Gold Technical Analysis# 24K99 News On Friday (September 6), the spot gold remained stable in the early European session, and the current gold price is around $2518/ounce. FXStreet analyst Haresh Menghani has written a new article on Friday, continuing to analyze the technical trends of gold prices.

Menghani pointed out that due to the sell-off of the US dollar caused by the dovish Federal Reserve, the gold price is still supported near the weekly high. Concerns about economic recession have re-emerged, further supporting gold as a safe-haven commodity.

The 'small non-farm' ADP employment report released by the United States on Thursday showed that the number of private sector employees increased by 0.099 million in August after seasonal adjustments, reaching a new low since January 2021. It fell far short of the economists' expected 0.144 million and also fell short of the revised 0.111 million in July.

On Thursday, due to the impact of weak US ADP employment data, the US dollar was suppressed, and spot gold closed up $21.36, up 0.86%, at $2516.58/ounce; the highest price touched $2523.54/ounce during the session.

Menghani states that the current gold bulls are turning cautious, focusing on the key US non-farm payroll report, and then preparing for further rise.

At 20:30 Beijing time on Friday, investors will welcome the US August non-farm payroll report, which may affect the path of the US Federal Reserve's interest rate cut.

Authoritative media surveys show that the seasonally adjusted non-farm employment in the United States is expected to increase by 0.16 million in August, compared to an increase of 0.114 million in July. The US unemployment rate in August is expected to decline from 4.3% to 4.2%.

The survey also shows that the average hourly wage rate in the United States is expected to rise by 0.3% in August, higher than the 0.2% in the previous month. The year-on-year growth rate of the average hourly wage in the United States in August is expected to increase from 3.6% to 3.7%.

Menghani wrote that even if the closely watched monthly employment data in the United States is slightly disappointing, it may still be unfavorable for the US dollar and pave the way for some meaningful rise in gold. In contrast, in the prospect of the Federal Reserve about to start an interest rate cut cycle, the market's immediate reaction to better-than-expected reports is likely to be limited. The price of gold is still expected to record a moderate weekly increase, and the fundamental background seems firmly favorable to call traders.

How to trade gold?

Menghani pointed out that from a technical point of view, if the gold price continues to break through the resistance level at 2524-2525 US dollars/ounce, it will reaffirm the recent positive outlook. Given that the oscillation indicator on the daily chart is staying in the positive zone and still far from the overbought zone, the gold price may target the historical high around 2531-2532 US dollars/ounce touched in August when it breaks through.

If gold continues to rise thereafter, it should pave the way for the recovery of the stable upward trend that has occurred in the past two months or so.

(Spot gold daily chart source: FXStreet)

On the other hand, Menghani added that the psychological barrier of 2500 US dollars/ounce now seems to protect the recent downside space. If it falls below this support, the gold price may fall to the level of the support at 2471-2470 US dollars/ounce.

If convincingly breaking through the above support, it will lay the foundation for the further decline of the gold price towards the 50-day simple moving average (currently around 2440 US dollars/ounce), and then fall to the level of 2400 US dollars/ounce and the 100-day moving average (around 2388 US dollar/ounce region).

At 16:37 Beijing time, spot gold was reported at 2517.57 US dollars/ounce.