The Gold Spot Price (XAUUSD) shed a hefty 1.6% on the last day of trading of the prior week. The surprise of the U.S. Non-Farm Payrolls, which came in much higher than expected, sent relief into the market that was embroiled in recessionary fears. Assets considered as safe haven, which the yellow metal falls under, suffered a selloff in Friday’s session due to increased risk appetite.

This week, traders will pay close attention to economic releases from the U.S., with Inflation Data and weekly labour market reports lined up. The critical factor to consider is whether a recession can indeed be avoided.

Technical

Following Friday’s selloff, the XAUUSD found support near the 100-day moving average, where bullish traders swept in to keep the yellow metal’s price buoyant. Support was established at the 1980.70 level, while resistance at the 2077.80 level formed the latest all-time high for the spot price.

Upside volumes have slowly worn off, with the spot price now trading in the midpoint of the support and resistance range. The decline in volumes to the upside could indicate weakening bullish momentum or bearish traders lurking.

U.S. economic data will likely be vital in giving bulls or bears conviction in a move higher or lower. If bearish economic data weighs the greenback, the XAUUSD will likely pick up steam to the upside, with the 2077.80 level earmarked as a point of interest. Alternatively, if U.S. economic data is bullish, the greenback could gain and weigh on the XAUUSD, leaving the 1980.70 level likely.

Summary

This week, traders will likely be on a mission to find signs of whether a mild recession in the U.S. and potentially the globe is probable. The U.S. economic data will probably be spotlighted this week as traders discern the potential of a recession and the next interest rate outlook. The 1980.70 and 2077.80 levels will be vital in defining the market sentiment.

Sources: Reuters, TradingView