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Gold attempts to rally out of downtrend
Gold managed to finally catch a break, thanks in no small part to yesterday’s weak US manufacturing PMI number. This has provided us with a crucial higher high given the break through $1312 resistance.
The current pullback could be a return of the recent weakness, yet given yesterday’s bounce came from such a critical support zone ($1300-1307), it could simply be providing a deep retracement before another leg higher. Ultimately the next week will be dictated by how the payrolls number will effect gold prices, with a strong non-farm payrolls figure likely to lead to selling, while a weak figure would likely help push prices back towards $1325 and $1345.
Meanwhile, it makes sense to look out for a potential 76.4% retracement for long entries, which could provide a cheap entry going into the payrolls number.