Gold prices rose sharply yesterday and consolidated above the round level of $2,000. It was driven by unexpectedly weak U.S. economic data.
The Labor Department reported declining job openings in February, which fell to their lowest level over the past two years.
The current situation indicates a decrease in need for employees. In addition, orders for American manufacturing plants reduced by 0.7% in March.
Economic data imply the U.S. monetary policy easing, or at least a pause in the recent series of rate hikes. It put pressure on the dollar index and lowered Treasury bond yields.
Central banks continue to actively buy gold amid declining confidence in reserve currencies. This process is only gaining momentum, and we more frequently see that countries and companies choose other currencies over the dollar.
According to the World Gold Council (WGC), the yellow metal market is still supported by central banks. Countries made some purchases in February, thereby replenishing their gold reserves at the fastest rate since 2010.
According to the technical analysis, gold had previously attempted to break below the triangle. This breakdown turned out to be false, it was followed by a strong buyback, and gold went up out of the figure on yesterday’s weak economic data. Technically, the growth might continue to the size of the triangle.
In this case, the growth target will be $2,068. This price is near gold's record highs. Stop-loss will be set when the price goes below $2,000 and returns to the level of the figure formation, which is equivalent to $1,995.
Gold prices are likely to rise:
Take profit — 2,068
Stop-loss — 1,995
This content is for informational purposes only and is not intended to be investing advice.
