Gold price jumps after US initial jobless claims for the week of May 30 dropped to 1.877 million from 2.126 million but came above the consensus estimates of 1.833 million. The positive news is that the downward trend continues, but the figure is still very high as the economy is reopening. The continuing claims rose to 21.49 million for the week of May 23 also above the expectations of a second drop to 20 million.
Earlier today the European Central Bank (ECB) said it would increase its Pandemic Emergency Purchase Program (PEPP) by 600 billion euro above the market’s expectations, bringing the program’s total to more than 1.2 trillion euro.
The gold price was under selling pressure this week on hopes for a fast recovery as the economies reopening around the globe after the coronavirus lockdown. Investors shift their attention to risky assets, and the global equities hit three-month highs while safe-haven assets sold off. Gold yesterday breached below bellow the 1,700 mark but managed to settle by the end of the day above 1,700.
Gold price is 0.81% higher at 1,712 recovering some of yesterday’s sharp losses. Gold pierced yesterday below the 1,700 mark and below the 50-day moving average. Today gold price tested the 50-day moving average again and managed to rebound strongly. The last time that gold price was below the 50-day moving average was on April 2nd. The technical outlook for gold remains bullish as long as the price holds above the 50-day SMA.
On the upside, initial resistance stands at 1,718 the daily top. If the gold price breaks above 1,718, then the next obstacle would be met at 1,732 the high from June 3rd trading session. More offers would emerge at 1,746 the high from June 2nd.
On the flip side, the first support for gold stands at 1,696 the daily low and the 50-day SMA, while more buying interest might emerge at 1,688 the low from yesterday. In case the bears continue the pressure, then the next support zone stands at 1,669 the low from May 1st.