Gold looks set to post third straight week of gains, mainly due to a two-day rally after the Federal Reserve decision which sent the greenback lower across the board. However, the precious metal has yet to confirm its recovery above the $1,500 psychological handle, with the bullion shows some signs of weakness early on Friday.
The Fed’s interest rate cut provided a fundamental support to the yellow metal but the positive reaction was limited as the central bank signaled a pause in its easing cycle after three cuts by 0.25 percent each. Also, traders continue to monitor developments on the US-China trade front, after Beijing admitted that it is doubting the long-term trade deal is possible with Trump. The headlines fueled risk aversion nearly across the board, which lifted gold prices to one-week highs around $1,514.
In the short-term, the precious metal could be affected by dollar reaction to the upcoming US NFP employment data. The ADP report pointed to a healthy jobs growth and should the key release confirm the bullishness, including wages data, the greenback will shift to a widespread recovery mode. In this scenario, gold prices will have to retreat. Once below the $1,5000 handle, the billion will turn negative in the weekly charts.