Gold – crucial economic events this week to offer new direction signals

Gold prices edged higher early Wednesday, rebounding from the lower boundary of their near-term range. However, the metal remains directionless as markets await fresh cues from key economic events this week.

Conflicting technical indicators on the daily chart are contributing to this sideways movement. A slight bullish bias is expected to persist as long as the price remains above the upper boundary of the thick daily Ichimoku cloud at $2324, which has provided significant support by repelling several downward attacks over the past two weeks.

Conversely, negative 14-day momentum and a bearish Tenkan/Kijun-sen cross are weighing on the price.

Today, the focus will be on the US services PMI (forecast at 49.4 for April). If the May figure stays below the 50 threshold, it could be a positive signal for gold.

This week’s series of reports from the US labor sector began with the release of the JOLTS job openings report on Tuesday, which showed April figures dropping well below forecasts and previous releases, hitting the lowest level in over two years.

Markets are now awaiting the release of the US ADP private sector payroll data later today (forecast at 173K versus 192K in April) and the week’s main economic event – the US nonfarm payrolls due on Friday (forecast at 185K versus 175K in April).

Overall stronger labor data would suggest a further delay in the Fed’s first rate cut, likely pushing it to November, which would be a negative signal for gold. Conversely, signs of a weakening US labor sector would increase expectations for a rate cut in September, which would weaken the dollar.

For initial directional signals, watch for a break below the daily cloud top at $2324 (bearish) or above the daily Kijun-sen and recent range top at $2363 (bullish).

Res: 2345; 2363; 2382; 2398
Sup: 2324; 2300; 2272; 2222