Gold bounces from $1500 in a strong rebound

Technical Analysis

Buyers step in at the figure

Non-farm payrolls were just weak enough to keep the market comfortable with the idea of two more Fed rate cuts this year.

In turn, gold has jumped $20 in a sharp reversal higher to end a two-day rout.

In my view, there is an unceasing and growing appetite to buy gold from fund managers and retail. We’re still in the early innings. There was certainly a flush out of some weak hands yesterday but the bounce today — especially if it lasts through the close — is a great sign.

Ultimately, what matters is that we’re in a global easing cycle. Today’s 50 bps RRR cut from China underscores that. Undoubtedly there will be an ebb and flow but until it ends, gold will have a tailwind.

ForexLive

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