The yellow metal broke the 1800 level resistance today, and while above the 1800 level the risk is for a move back to the 200dma. The double bottom pattern will target the 1838 level first, but since the daily RSI is nowhere near overbought the 200dma and the 61.8% Fibonacci ration near the 1855 level seems like a logical target near term. Keep in mind that the move back to the 1756 level last week was a 38% “shallow” retracement which is assisting this move higher near term.
Gold recently takes cues from the market optimism and hence a pullback in stock futures as well as the US 10-year Treasury yields, seem to have weighed on the prices. Even so, gold buyers remain hopeful as the US employment report for April is likely to print strong job numbers.
Looking ahead for today, analysts at Westpac see ”1.1mn new jobs and believe further upward revisions to prior months could also be seen.” The analysts argue that this should see the unemployment rate fall to 5.8%. Moreover, they said average hourly earnings should edge up a more muted 0.1%, given the remaining slack in the labour market.
In The Meantime, it may take a surprise in the data to really convince the market that the Fed will taper or raise rates sooner than they would like to.
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