Gold: Will Payrolls & Powell lift the yellow metal?

• Metal sees solid two-way business on trade war on/trade war off scenarios.
• Wage growth number will likely overshadow payrolls.
• Powell likely to defend gradual rate hike path.

Gold has witnessed a solid two-way business in the previous two trading sessions, as markets stand divided on whether the US and China are cruising towards full-blown trade war or merely adopting a tough stance to bring the other party to the negotiating table.

However, in a larger scheme of things, the yellow metal lacks direction and awaits a convincing bull flag breakout.

The treasury yields and the US dollar will likely take a beating, sending the yellow metal above the flag resistance if the US March average hourly earnings print well below the estimates. On the other hand, a super strong number could push gold prices down to recent lows below $1,310.

Meanwhile, the Powell speech risks turning out to be a non-event, if the central bank chief defends the gradual rate hike path as expected. However, the metal may run into offers if Powell sounds hawkish.

Gold Technical Levels

A convincing move above $1,352 would confirm a bull flag breakout and open the doors to $1,366 (January high) and $1,375 (July high). On the downside, a move below $1,318 (100-day moving average) could yield a pullback to $1,307 (March 20 low) and $1,300 (psychological level).