The price of gold was resilient following the latest US Federal Fund Rate rise of a quarter point to 5.5 per cent, moving towards $2,000 per ounce.
Gold traded between $1,965 and $1,987 in July, with a range of $1,893 to $1,983 in June.
The sideways movement started in late May, indicating that a US interest rate hike would not do much to weaken gold and curb its bullish trend.
However, the daily price of gold began the new month of August with pressure from the US treasury yield and dollar index edging higher.
According to Investing.com, the US dollar index on Tuesday increased by 0.5 per cent to 102.085.
As of Wednesday, gold dropped to around $1,941 per ounce.
Despite that, the market was still digesting the recent negative influence of July’s US manufacturing sector data and June’s job opening figures, both released on August 1.
Forex Factory reported on the Institute for Supply Management (ISM) Manufacturing PMI data reading at 46.4 per cent – again below 50 marking the ninth month of business contraction. Job openings decreased from 9.62 million to 9.58 million.
PP Link Securities (PPLS) deputy general manager Nhim Kosol said the market this week will be looking ahead to the US jobs data scheduled to be released on Friday at 7:30pm Cambodian time.
Next month’s expected employment figures from the US Bureau of Labor Statistics were, Forex Factory said, likely to hurt the US dollar.
The unemployment rate was forecast to remain at 3.6 per cent, while Average Hourly Earnings were predicted to be down 0.1 per cent from the previous month’s actual figure of 0.4 per cent, according to Forex Factory.
The Non-Farm Employment Change was expected to report 6,000 jobs fewer than June’s 209,000.
“With the aforementioned fundamentals, as well as the sentiment that the Fed has finished raising interest rates, the price of gold could rise to $1,965 if it can find strong support at $1,940,” said expert market analyst Kosol.
For this week’s trading recommendation, by using the Fibonacci retracement indicator from the low of $1,893 and the high of $1,987, gold may open buying opportunities in the range of $1,923 to $1,940.