The gold price on Thursday failed to add to the current weekly gains after finding strong resistance around the $1,640 level. Gold has since pulled back off overbought levels to trade within the normal trading zone of the 60-min RSI.
The price of the yellow metal appears to be still experiencing strong short-term bullish pressure. This means that today’s pullback could create an opportunity for the next rally to kick on.
Gold Price Fundamentals Overview
Froma fundamental perspective, the price of gold is trading at the back of another busy period in the US market. The impact of the coronavirus pandemic appears to be taking its toll on the market. After the US shut down business activity to limit the spread of the coronavirus, many jobs have since been lost. The latest jobless claims data for last week showed an initial jobless claims figure of 3.283million. Analysts were expecting 1 million claims, a significant increment from the previous week’s figure of 232k.
Furthermore, while the coronavirus pandemic appears to be presently concentrated on the eastern coast, especially New York, it also appears to be spreading to the rest of the US. The net impact could result in even more jobless claims in the coming weeks, which would hurt the greenback more. The preliminary Markit manufacturing data for March beat the expectation of 42.3 with 49.2. However, the service PMI missed 42 with 39.1 while the PMI composite edged lower to 40.5 down from 49.6 in the previous period. Durable Goods orders ex-transportation and non-defense capital goods also disappointed.
Gold Price Technical Analysis (the 60-min Chart)
Technically, the price of gold appears to be experiencing a short-term bullish bias in the market sentiment. This comes at the back of growing concern about the economic prospects of the US economy amid coronavirus impact.
The bears will be targeting pullback profits at around $1,616 or lower at $1,599. On the other hand, the bulls will relish the opportunity to extend gains towards $1,642 or higher at $1,658.
Gold Price Technical Analysis (the Daily Chart)
In the daily chart, the price of the yellow metal appears to have made a sharp recovery following the recent decline. This has taken the gold price back to the confines of the ascending channel, which supports a long-term bullish bias in the market sentiment.
Therefore, the bulls will look to extend long-term gains towards $1,671 or higher at $1,708. On the other hand, the bears will target pullback profits at around $1,585, $1,541 or lower at $1,488.