The Fed and ECB meetings in the last two days were the main events in the market. As it was expected, volatility significantly increased in the markets. Gold prices also showed momentum, with volatility averaging 2.5% over the past two days, well above average. Now volatility will fade and markets will rethink the regulators' statements. As it was posted earlier, the regulators did not change their rhetoric, so rates will not be cut this year. That means the gold adjustment may be just the beginning.
On Thursday, the U.S. Labor Department reported a decline in the number of jobless claims. The number was down 3,000 this week to 183,000 applications. The latest labor market data beat expectations. Economists had expected jobless claims to go up to 196,000, according to the consensus forecast.
The economic data did have an impact on the precious metals, as the gold market saw a pullback. The decline in jobless claims may affect the increase in U.S. employment.
Today, the U.S. non-farm payrolls data is on the agenda. Analysts are expecting a slowdown in the number of employed people compared to last week. The higher-than-expected non-farm payrolls data may confirm expectations of a long interest rates’ level. In this case, gold may accelerate its decline.
As for the technical analysis, the gold broke the uptrend after all. The RSI on the daily time frame is neutral and it does not show any signal. In the hour timeframe, the local oversold area has disappeared, so there is an opportunity for a further decline. Now it is fixed at the lower border of the rectangle. Thus, there is an opportunity for a further gold decline. The first target can be set at a round level of $1.900, which has already been tested before. Stop-loss could be put at the second return inside the rectangle at the level of $1923.
The gold price decline:
Take profit – 1 923
Stop-loss – 1 902
This content is for informational purposes only and is not intended to be investing advice.
