Let's try to keep this one short, shall we?
Two weeks back, gold looked poised for a technical break as it jumped above key resistance at the time near $2,480. The move higher also took out the $2,500 mark but since then, there wasn't much follow through.
Instead, we got caught in a consolidation phase in and around $2,500 and that is pretty much where we are at still today.
So, that puts gold in a position still vying for a stronger breakout above $2,500 as we get into what is a big week for the dollar.
The focus in trading this week is going to be on US data, especially the jobs-related ones. Today, we will be getting the ISM manufacturing PMI. But in the days ahead, all the attention in markets will gyrate towards the non-farm payrolls report on Friday.
The greenback did battle back in month-end trading last week. However, this week will be the real test to see if the dollar can hold its ground or face another breakdown as the US labour market falters.
As such, gold is still looking poised but a firmer break will be conditional on US data for the most part. That given dollar sentiment is going to be the key driver this week.
Personally, I will still prefer if we got a more significant technical pullback in gold to pile more into longs. We haven't really got that this year and that makes every next step higher a bit more dangerous.
As for the bigger picture outlook, you can check out Adam's post here: The very simple case for buying gold
