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Gold falls as the US dollar recovers

Gold prices are declining on Friday after renewing their monthly highs the day before.


On Thursday, gold surged above $ 1,758 for the first time since March 1 after the release of unexpectedly disappointing US jobless claims data. The number of applications increased by 777 thousand against the forecast of +680 thousand.


Today, the value of gold is declining due to technical and fundamental factors. First, at the end of the trading week, many investors began to fix long positions in gold after renewing the monthly high. Secondly, today the dollar index and the yield of the American Treasuries are showing a moderately upward movement vector. Gold has a strong inverse correlation with these instruments.


In general, the market continues to act based on the statements of the head of the Fed, Jerome Powell, made at an event organized by the IMF. Powell continued to defend the “dovish” position of the Fed and once again noted that the regulator does not intend to make adjustments to monetary policy yet. Powell dwelled on the issue of inflation separately. He noted that a one-time short-term rise in prices is not a sign of sustained growth in inflation. Powell does not expect a sustained rise in consumer prices in the near future. Most likely, the price increase will be temporary. But even if growth is more resilient, the Fed has a large arsenal of tools to fight inflation.


Today investors will be watching the publication of data on the rise in producer prices in the US for March. This is one of the leading indicators of the consumer price index.

Other metals are under pressure today. Silver was down by 0.9%. Platinum fell by 0.8%. Palladium fell by 0.4%.


A reversal signal can be formed on the chart - a false breakout. The price failed to gain a foothold above the local maximum of 1755.00 and is now trading below this mark. We can see the development of a pullback movement with the first target at 1743.00.


  • Resistance levels: 1755.00, 1773.00, 1810.00.


  • Support levels: 1743.00, 1722.70, 1706.50.


The main scenario is a decline to 1743.00.


Alternative scenario - consolidation above 1755.00 and growth in the direction of 1773.00.


The current fundamental background is neutral. We consider shorts from the level of 1755.00.

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