Gold gained against the American dollar for the second time in three days. The XAU/USD pair traded as low as $1321.15 an ounce after the ADP Research Institute said companies added 281000 workers last month -more than expectation of 207000- but prices bounced back above the 1326 level as buyers stepped in. During today’s Asian session the gold market appears to be stable with the bulls and bears gaining and losing ground almost equally.
However, the bulls have been struggling to break through the 1331 resistance level -which I think as a vital point for the bulls to push prices higher- for the last two sessions. Market participants are understandably in a more cautious mode ahead of the Labor Department’s monthly jobs report. Although the ADP's report isn’t so reliable predicting the official data, it is pointing to a better non-farm payrolls reading.
If data beat expectations, the bulls may start to feel some extra pressure because of the money flowing in to the global equity markets. From an intra-day perspective, I think the pair has to push its way through the 1331 resistance level in order to gain some traction. Beyond 1331, resistance can be found at 1334, 1340 and 1352. If we can’t get through it, this will probably encourage the sellers a little bit. To the down side, there is an interim support between the 1320 and 1319 levels where the Tenkan-sen (nine-period moving average, red line) currently sits on the daily time frame. If the bears increase downward pressure and the XAU/USD pair falls below 1319, it is likely that we will be testing the support at 1314/12.
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