- Gold prices jump to two-week highs
- The US expects grim nonfarm jobs data
- Unemployment claims hit 33.5 million in the US
Gold prices (XAU/USD) are hovering around a two-week high attained in the previous session as investors look to US jobs data to determine the state of the economy after uninspiring economic data increased the possibility to more interest rate cuts by the Fed.
Gold prices will continue rising alongside stocks
Slashing of rates will suppress bond yields and, as a result, enhance demand for gold. When equity markets are performing poorly, gold tends to benefit, and RBC strategist Chris Louney, indicates that the low rates, global uncertainty, and the monetary stimulus will continue supporting gold to rise despite expected equity market rallies.
Louney indicates that the economic stimulus expected to shore up the economy will also stimulate gold from a different perspective. He adds that despite gold acting as a hedge against the risk, it can also gain alongside equity markets as economies commence recovery.
The grim employment data could support gold prices as investors seek havens against inflation. Last week several Americans filed for unemployment claims. The number of people who have sought jobless claims since March is around 33.5 million.
Time : 08-05-2020
Pivot : $1707.19
Technical View : Long above $1714.71
Target : $1722.21 next 3 targets $1730.63, $1745.57 and $1768.81
Comments : Weak Bullish
Last Price : $1715.29
On Thursday, gold was up 2% at the back of the grim economic data, the brewing US/China tensions, and uncertainties of a global economic downturn. Spot gold has steadied around $1,715.29 per gold ounce after hitting a high since April 27th, around $1,721.79 in the Thursday session. On the other hand, US gold futures jumped 0.1% to around $1,727.00 per ounce.
Currently, gold prices are still hovering between the $1,650 and $1,750 range of April. For now, it seems gold prices will continue upwards and no need for investors to be riled unless bullion challenges these levels.