Remember the symmetrical triangle I pointed out on gold price yesterday? It has now been invalidated after the jobless claims report from the US came out. As of this writing, gold price is up by almost $26.00 from yesterday’s lows at $1,710.65.
The Department of Labor reported that 2.981 million people filed for unemployment benefits last week. Not only was this figure more than the 2.500 million that was anticipated, the previous reading was also revised upward to 3.176 million from 3.169 million. This consequently spurred talks that Fed Reserve Chairman Jerome Powell may soon be forced to implement negative rates despite dismissing them earlier this week.
Later today, the US retail sales report is due at 1:30 pm GMT. The headline figure is seen at 12.0% while the core reading, which excludes volatile goods and services, is seen at -8.6%. More negative reports from the US could fuel the rally in gold while positive data could strengthen the dollar and push XAUUSD lower.
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Gold Price Outlook
As you will learn in our free forex trading course, an upside break from a symmetrical triangle suggests that buyers are dominating trading. This is exactly what happened to gold price. Resistance at the top of the triangle around $1,717.15 was invalidated and now XAUUSD is trading much higher at $1,733.55.
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A closer look at the 1-hour chart also suggests there is more upside potential ahead. Gold price has been trading in a tight consolidation for the past trading hours. Because this follows a sharp uptrend, a bullish flag has become apparent. When you enroll in our forex trading course, you will learn that this is a bullish continuation pattern. This means that an upside break above yesterday’s high at $1,736.26 could trigger a rally to the highs of April 14 at $1,746.93.
On the other hand, a break below the consolidation at $1,728.31 could indicate more downside potential. Should this happen, gold price could drop to $1,715.12 where it could retest the triangle.More content
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