Friday trading shows a moderate decline by 0.5% from gold against the background of mixed dynamics of stock indices and strengthening dollar.
Despite the release of disappointing data on the U.S. labor market, the U.S. dollar keeps the upward trend, increasing pressure on precious metal. Contrary to the forecasts of experts, who predicted an increase in the number of applications for unemployment benefits by 3.5 million, the actual growth was 6.648 million. Data suggests that the Coronavirus Pandemic continues to slow down economic activity in the U.S. and will increase pressure on the labor market. At the same time, many experts expect the situation to worsen, as the number of people ill in the U.S. has already exceeded 235 000, and an increasing number of states will introduce quarantine.
It is obvious that against the backdrop of the Coronavirus pandemic, market volatility will remain high. Gold still retains its status of the main protective asset, so it has a good chance of continuing to grow in the medium term.
The main event today will be the publication of the U.S. labor market report, which may seriously weaken the dollar's position in the global arena. Although many experts note that the figures presented today may lose their relevance, as data for the report are collected until the 12th, when the restrictive measures in the U.S. were not as widely used as now.
On the chart today, we follow the level of 1603.00. This is a key intraday support level from which we can expect the formation of a new bullish wave with a target at 1635.00. If the level of 1603.00 is breached, we should expect the quotes to decline by 1585.00.
The main scenario is a decline to 1603.00 and growth towards 1635.00.
The alternative scenario is a break-down of the support at 1603.00 and a decline to 1585.00.
The fundamental background is neutral. Bullish signals prevail on the chart in the medium term, so we prefer to buy an instrument with very moderate risks. We are looking for entry points at 1603.00 and 1585.00.
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