Gold rises in price in anticipation of the US labor market data
After the strong recent growth gold has stabilized. Trading is currently constrained in the area of yesterday's highs at the level of $1,722.
The weekly data on the US labor market was the main driver for gold price. According to yesterday's report, 3.169 million people became unemployed in the US within the past week. Since the end of March, more than 31 million people have lost their jobs. The unemployment rate in the country is currently about 16%.
Today, the situation on the stock exchanges has a restraining effect on gold. The main indexes are traded in the green zone after the news that Vice President of the State Council of the PRC Liu He held telephone conversations with US Trade Representative Robert Lighthizer and Finance Minister Stephen Mnuchin. Following the meeting, the parties agreed to intensify cooperation in the economy and healthcare, as well as create a favorable background for fulfilling the terms of the interim trade agreement, which was signed at the beginning of the year.
The central event of today will be the April report on the US labor market. According to experts, the main indicators can update historical anti-records. A strong increase in volatility is expected, but it is very difficult to predict the reaction of the market to this event.
Regarding the chart, we note the increase in upward pressure on resistance in the area around the level of 1722.00. Therefore, we consider the scenario with the breakdown of this target and the growth of quotations towards the level of 1740.00 as the main priority.
Resistance Levels: 1722.00, 1740.00, 1750.00;
Support Levels: 1710.00, 16495.00, 1670.00.
The main scenario - a breakdown of resistance at 1722.00 and an increase to 1740.00.
An alternative scenario is a breakdown of support at 1710.00 and a decline to 1695.00.
The current fundamental outlook is neutral. Today we recommend staying out of the market. As an alternative scenario, you can consider longs with very moderate risks from the level of 1710.00.