Spot gold fell 1.5% on Friday, extending steep fall into third straight day, after bulls stalled at pivotal Fibo resistance at $1956 (61.8% of $2074/$1764 fall).
The price fell below $1900 for the first time in one week, as dollar gained traction, on hopes that interest rates will rise on growing economic recovery prospect.
Three-day pullback found footstep at key Fibo support at $1884 (38.2% of $1764/$1959) with dip seen as positioning ahead of US non-farm payrolls data, as Democrats’ control of the US Senate fuels expectations of larger stimulus measures that would further boost metal’s appeal as an inflation hedge.
Larger uptrend continues to focus $2000 barrier, but such scenario requires firm break of pivotal barriers at $1956/65 (Fibo 61.8% / Nov 9 lower high).
On the other side, risk of further weakness remains in play on persisting expectations that US economic recovery would pick up in 2021 and prompt Fed to reduce asset purchasing program.
Bearish near-term scenario sees clear break of $1884 Fibo support that would risk test of daily cloud top ($1865) and Fibo 61.8% of $1764/$1959) in extension.
Conversely, lift and weekly close above $1956/65 pivots would shift near-term focus higher.
US jobs data are eyed for fresh signals.
Res: 1897; 1913; 1918; 1928.
Sup: 1884; 1878; 1865; 1861.