Gold is fluctuating ahead of the release of new U.S. Nonfarm Payrolls. Yesterday’s Initial Jobless Claims data exceeded market expectations. Those figures had a positive effect on the market, however, the growth was short-lived. Nevertheless, it gave hope to the market that today’s data on employment would be weaker than expected. Readings that are in line or above analysts' estimates, will have a negative effect on the market.
Strategists at Canadian bank TD Securities predict that the precious metal will suffer new losses if it falls below the $1,806 support level.
As experts note, a long-term growth of interest rates will put pressure on key support levels of gold.
If prices for the yellow metal fall below that level, it will be a signal for investors to reduce their positions.
Gold was below that level, when it rebounded. One can expect a retest of the level given an external negativity.
Tom Price, an analyst at the British investment bank Liberum, anticipates industrial metal prices, including the one of silver, to be more promising than the price of gold. At the beginning of 2023, the “bullish” sentiment was stronger, and, as a result, the gold prices surged. After a “hawkish” speech by Central Bank Chairman Jerome Powell, the “bearish” sentiment became dominant again and prices started to decline.
Liberum gives a “bearish” outlook on gold over the next 2-3 years, noting that the Fed would exert some pressure on the metal. The average price per ounce this year will be $1,690.
This is another negative forecast for gold.
On the technical analysis, the gold price has formed a flat of $1,810-1,850. The price is now slightly above the center of this rectangle. Taking into account the negative fundamentals, the price is expected to move to the lower boundary. The downside target will be $1813. Stop-loss can be placed on the upper boundary. It’s the level of $1848.
Drop in the gold price:
Take profit — 1813
Stop-loss — 1 848