Widely viewed as a haven asset amongst investors, gold prices found support for further upside ahead of the highly-anticipated US employment report due Friday that could set the tone for the pace of Fed rate hikes. Economists are estimating that 178,000 new jobs were created in March, with the unemployment rate likely to remain steady at 4.70%. Today’s ADP nonfarm employment figure should give some hints as to the general job creation trend.
However, the recent recovery in the US dollar and its historical inverse relationship with precious metals is capping gold’s gains. Technical analysts reckon that the current shift in sentiment should see gold rally towards $1265 - the highs for the year. Any further upside will depend on whether the bulls have the strength to push prices higher while on the downside, $1248 presents a strong floor.