Gold prices are holding slightly above $1,920 on Monday. Last week's U.S. jobs data has raised doubts about the strength of the labor market. That has made investors more skeptical about the Federal Reserve's (Fed) plans to raise interest rates.
The Labor Department's employment report released on Friday showed a 2.5-year low in the number of new jobs created in June.
Their number was also low in April and May, indicating that rising borrowing costs are hampering companies' willingness to increase the number of employees.
Meanwhile, U.S. Treasury Secretary Janet Yellen expressed satisfaction with the results of her dialogue with top Chinese officials in Beijing. The meeting helped stabilize relations between the two superpowers.
Invesco's survey of central banks and sovereign wealth funds, released Monday, showed a tendency for regulators to repatriate their gold reserves as a hedge against sanctions.
The collapse of financial markets last year led to widespread investment losses and forced many specialists to rethink their money management strategies. They are now considering high inflation and geopolitical tension as long-term issues.
More than 85% of the 85 sovereign wealth funds and 57 central banks that took part in Invesco's annual survey expect higher inflation in the next decade than in the past. In this environment, gold and emerging market bonds become attractive assets.
Nevertheless, 68% of survey participants noted that they prefer to store yellow metal at home rather than on international exchanges. In 2020, this value was equal to 50%. Thus, the states are trying to ensure the safety of their investments.
However, high interest rates are also reducing the attractiveness of gold, which does not generate interest income.
The H4 timeframe shows the gold price correcting in a descending channel.
The Relative Strength Index indicator (standard values) shows a divergence, which gives a leading signal for a possible trend change. Breakdown of the downward support is expected.
Short-term prospects for gold suggest buying.
The target is at the level of 1965,00.
Part of the profit should be taken near the level of 1945,00.
A stop-loss could be placed near the level of 1895,00.
The bullish trend is short-term, so trade volume should not exceed 2% of your balance.