Gold Intrday: Slight Change in Reactions to Data, Nonfarm Payroll in Focus
George Lam May 8, 2020 5:02 AM
Just as coronavirus crisis seems to be easing and investors were well-braced for gloomy economic data, Federal Reserve officals poured cold water on such optimism...
Philadelphia Fed President Patrick Harker warned, in a CNBC interview, that reopening the economy prematurely would be a "health catastrophe" and set back the recovery. Meanwhile Minneapolis Fed President Neel Kashkari said he expects a long and gradual economic recovery, rather than a quick bounce back. Their comments reinforce the view that loose monetary policy is likely to be maintained for a certain period of time, which would be a big plus for the precious metal.
Source: Trading Economics
While a mighty 20.236 million U.S. private jobs losses in April, reported by ADP on Wednesday, did not lift up gold price, the latest initial jobless claims of 3.169 million yesterday, which showed a declining trend as indicated on the chart above, did not push down the price either. This may suggest that investors' interpretation of economic data changed quickly and their optimism over the outlook has now eased.
From a technical point of view, spot gold is showing initial signs of an upside breakout as shown on the 1-hour chart. It has broken above a symmetrical triangle pattern, while trading within a bigger bullish flat pattern. Bullish investors might consider $1,697 as the nearest intraday support, and gold would need to break above its nearest resistance at $1,739 to open a path to the next resistance at $1,760. Alternatively, losing $1,697 would suggest that it may return to $1,682 and $1,661 on the downside.
Source: TradingView, Gain Capital
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.