Gold drops to 1-hr 200-MA as T-yield rise after US data

Gold prices briefly dipped below the 1-hour 200-MA level of $1261.82, while the long duration and the short duration treasury yields ticked higher after the US job creation beat estimates and the wage growth gathered pace as expected.

Gold - Potential head and shoulders formation on 4-hour chart

The 1-hour chart shows a head and shoulders formation with neckline support around $1257 levels.

The safe haven metal dropped from $1268 as the July non-farm payrolls figure came-in at 209K, beating the estimated figure of 180K. The jobless rate dropped to 4.3%, while the June trade deficit narrowed more than expected. Wage growth rose to 0.3% as expected.

The uptick in the Treasury yields tells us the data is being well received by the markets. The 10-yr yield is up 3 basis points and the 2-yr yield is up 2.4 basis points. Thus, the bid tone around the USD has strengthened, while gold is losing weight.

Gold Technical Levels

The yellow metal was last seen trading around $1262/Oz levels. A breakdown of support $1256.85 [previous day’s low] would open doors for $1248 [50-DMA + 100-DMA + 38.2% Fib] and $143.78 [July 6 low on 1-hour chart]. On the higher side, resistance is seen at $1274.14 [recent high] ahead of $1280.94 [June 14 high] and $1296.09 [June high].