Gold tests 50-day SMA support ahead of NFP

• China central bank ended 18-month bullion buying spree
   
• Gold traders sensitive to incoming US jobs report
   
• Weaker US hiring could help gold pare declines
   
• Bears could revisit $2315 if 50-day SMA support fails

Gold fell by more than 1% in mere minutes, breaking below its 50-day simple moving average (SMA).

Bullion bulls swiftly relented after the People's Bank of China (PBOC) - China's central bank - did not buy any gold to shore up its reserves in May 2024.

The news meant that the PBOC halted its gold purchases for the first time since October 2022!

Bullion purchases by central banks around the world, including India and Kazakhstan, had been widely cited as a key pillar for spot gold's stunning rally onto fresh record highs in 2024.

Hence, news that gold bulls have lost one of their pillars of support duly prompted the swift profit-taking.

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And bullion's volatility before the weekend may not yet be over.

Traders and investors worldwide remain guarded about the incoming NFP report, due in just a couple of hours.

• Stronger-than-expected hiring and wage growth, which in turn further delays Fed rate cuts, might prompt the precious metal to move even closer to $2300.
   
• On the other hand, gold bulls may find relief and restore spot gold back above its 50-day SMA upon seeing evidence that the US hiring is waning - an economic scenario that supports Fed rate cuts.

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