Gold Intraday: Upside Potential Likely to be Limited
George Lam June 10, 2020 2:18 AM
The Fed is likely to maintain a cautious view on the economic outlook later today, however the resilience of labour market should be acknowledged...
Spot gold climbed 1.0% on day to $1,715 yesterday, extending its rebound for a second straight session after a surprising growth in U.S. jobs reported last Friday. We stick to our view that gold is due for a deeper price correction in the short term, as the latest jobs report suggested that economic recovery is ongoing.
The U.S. Federal Reserve will release its monetary statement later today, even though it is likely to maintain a cautious view on the economic outlook, the resilience of labour market should be acknowledged.
From a technical point of view, the upside potential for spot gold appears to be limited as shown on the 1-hour chart. Currently, it is trading within a bearish channel drawn from May 18, and is approaching the upper boundary of the channel. Bearish investors might consider $1,730 as the nearest resistance, which is also the 61.8% Fibonacci retracement of the recent decline. Below this level, prices are likely to retreat to test the 1st and 2nd support at $1,700 and $1,689 respectively. Alternatively, bullish investors may wait to see a clear break through from $1,730, which would trigger a further rebound to test the next resistances at $1,745 and $1,754.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.