Gold price declined by more than 1% as the dollar index rose by more than 50 basis points. The rise of the dollar index came at a time when everyone is focusing on Coronavirus and its implications to the US economy.
There were three news today that were important to gold. First, China released better-than-expected manufacturing PMI data implying that other countries, including the United States would recover. Meanwhile, the World Health Organization (WHO) said that the pace of new infections was slowing. Third, the dollar index declined by more than 0.50%. The dollar and gold are usually inversely related.
Tomorrow will be an important day for gold as ADP will release its reading of private payrolls data. Economists polled by Refinitiv expect that the economy lost more than 150k jobs in March. This is after making more than 183k jobs. Still, the data by ADP tends to differ greatly with the official number by the government.
Thursday will be important too since we will receive the official jobless claims data. This is after the blockbuster number that was released a week ago. Finally, the big number will come on Friday, when the Labour department will release the official jobs numbers. Some economists expect the unemployment rate to rise to 30%, which is an unprecedented level.
While gold price dropped by about 1% today, the price has been moving in a horizontal pattern since Tuesday next week. It attempted to break higher but found resistance at the 1,643 level. It also found support at the 1,587 level. I expect the pair to move in this trend during the American session. I then expect some big movements starting from tomorrow.