After an impressive 14% surge last week, AngloGold Ashanti PLC (JSE: ANG) faced an 8% correction this week, mirroring the gold spot price’s retreat from its recent all-time highs. The action, however, is far from settled, with the upcoming US Non-Farm Payroll (NFP) report on Friday holding the potential to reshape the Federal Reserve’s stance on interest rates.
Currently, the CME FedWatch tool indicates a 60% probability of lower US rates by March next year, and the market is pricing in nearly a 40% chance of two 25bps cuts by May. In an environment of decreasing interest rates, gold’s allure tends to rise due to its non-yielding nature. This could pave the way for growth in the coming months if global monetary policies shift toward easing.
As we approach the release of the NFP data later today, the question lingers: Will AngloGold witness a late-week surge amid the unfolding economic developments?
Technical
On the weekly chart, a descending triangle is currently in play, with the psychological support at R297.56, keeping the sellers at bay. As things stand, the 100-SMA (orange line) is preventing additional downside for the week close to the 61.8% Fibonacci golden ratio of R337.34. Leading up to the jobs data report, the price could consolidate around this level in anticipation of a future directional trend.
Should the price fall below the 100-SMA, the triangle support at R297.56 could once again come under pressure. If the NFP report is unfavourable for gold, the breakdown could be triggered in the upcoming weeks, with lower support established at R249.86 and R213.07 if a long-term downtrend emerges.
However, failure to move below the 100-SMA could prevent this breakdown, potentially catalysing a pivot toward the dynamic triangle resistance close to the Fibonacci midpoint of R376.03. This resistance could prove challenging to cross and may need a large influx of volume to sustainably remain above the 50-SMA (blue line) at R381.15.
Summary
With the gold spot price giving back its recent gains, AngloGold Ashanti has been under pressure in the current week. As we advance, the NFP report could be a driving force behind the directional trend, with the 100-SMA being a critical level to watch on the weekly chart.
Sources: Koyfin, Tradingview, CME Group
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
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