Gold prices on Friday fell to a new 9-month low on the back of a strengthening US dollar and rising yields on US government bonds.
Speaking yesterday at an event organized by The Wall Street Journal, the head of the Fed noted that the economy is far from reaching full employment. At the same time, he refrained from signals about the Fed's intention to increase purchases of long-term government bonds in order to restrain the growth of their yields. Such views of the Fed on the situation on the debt securities market disappointed many investors. After Powell's comments, stock indices continued their decline, the dollar index updated its 3-month high of trading, and the yield curve of 10-year government bonds rose to the annual highs set last week. Today these market trends continue.
Later today, traders will be watching the release of data on the US labor market. Experts predict an increase in the number of people employed in the non-agricultural sector from 49 thousand to 182 thousand and a preservation of the unemployment rate at around 6.3%.
Other precious metals are also on a downward trend today. Silver and platinum are down by more than 0.7%. Palladium lost about 0.6% in price.
The chart is still dominated by bearish signals. The scenario with the development of the downward movement towards the level of 1680.00 remains the priority.
The main scenario is consolidation above 1700.00 and growth to 1720.00.
An alternative scenario is a decline to 1680.00.
The current fundamental background is moderately negative. We consider shorts on a pullback to the level of 1720.00.
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