FX.co ★ Analysis of gold for March 07, 2014

The first time claims for the US unemployment benefits fell last week to a three month low, but remained little unchanged from a year ago. It fell more than expected and hit a three month low. It's a good sign of labor market. Initial jobless claims totalled 323,000 in the week ending March 1, a decline of 26,000 from the prior week's revised reading of 349,000. Traders keep an eye on today's highly anticipated non-farm payroll data. The European central bank kept its interest rate on hold.

Technical view-

Gold is in overbought conditions and negative divergence in the daily chart. At the upper end of a rising channel it could be due for a correction. The 20dma is at $1,315 and rising; it could move up to $1,320 as the first support level and 38.2% retracement at $1,310 as the second potential support and a target. Holding one of these levels the correction should complete. A move below the level of $1,328.0 opens major downside targets. If price breaks out on the upper side above $1,355.0, we will see $1,362.0 and $1,372.0 in intraday only.

Positional- sell on rallies. $1,355.0 neckline resistance

S1 $1,328.0 R1 $1,355.0

S2 $1,318.0 R2 $1,362.0

S3 $1,310.0 R3 $1,395.0.

A day close above the level of $1,355.0, we will see $1,362.0, $1,375.0, $1,395.0, $1,420.0, and $1,440.0. Before further up move, the price will come down first towards $1328.0, $1,310.0.