After three days of hard selling, we are not convinced by the validity of this hammer and it has not been confirmed by follow through buying today, though it cannot be discounted at this stage.
Today's major news is the US Non Farm Payrolls (NFP) number for March - as we know, this is the most closely watched economic indicator and has taken on even more importance in recent months following the Fed's statement that they have a target unemployment rate of 6.5% that will spell the end of Quantitative Easing.
We expect quiet, range bound trading until the release of the NFP data at 1.30 UK time, after which the gold market may move sharply. The previous 5 or 6 releases of economic data from the US have missed expectations, including the ADP employment report, so the market expectations for a strong payroll number may have been reduced somewhat. The concensus is for an additional 190,000 jobs reported and for the unemployment rate to remain at 7.7%.
Even though the recent data releases have, on the face of it, been gold positive, the gold price has continued to exhibit weakness, falling to a 10 month low in recent trading sessions. There is therefore a significant danger of a gold sell off following the release, particularly if the data is stronger than forecast.
Today's video looks at the recent trading in more detail and some Elliott Wave counts, as well as what we look for as signs of a bottom.