Gold prices lost $28 with prices dropping to $1681 an ounce before returning to stability around the $1692 level at the time of writing. The recent sell-off is for profit-taking, and not a shift in the general direction of gold, which is still bullish. The decline might be an opportunity start buying gold again from stronger support levels ahead of the announcement of US job numbers, which usually have a strong affect to the US dollar and, accordingly, to gold. The strengthening of the US dollar and the reopening of some economies around the world reduced investor appetite for gold bars.
Some US states are mitigating measures that have been put in place to curb the spread of the coronavirus. The yellow metal may still be supported by expectations that the reopening of the global economy without a vaccine that eliminates the disease, will lead to a more violent wave of infections and deaths than what we now have. Gold analysts expect the yellow metal to see solid support around the $1650 level on the short term before continuing to target the $1,800 resistance for the next two months.
Dollar gains and the relatively persistent rise in stock markets amid the COVID-19 pandemic kept gold in a trading range around $1700 an ounce. Assets that are traded in dollars, such as gold, often move inversely with the currency, as a strong dollar can make the assets priced in it more expensive for buyers who use other currencies.
On economic news: The most prominent announcement was the ADP survey measure of the change of non-farm jobs in the United States, which confirmed the loss of more than 20 million jobs during the month of April as a natural reaction to the strict closure policy approved by the US government to contain the rapid spread of the Coronavirus. This epidemic has paralyzed the global economy as a whole, and with recession rates exceeding the global financial crisis of 2008-2009, reached the stage of the Great Depression in the thirties. The result of this statement paves the way to shocking numbers for the US jobs report, which will be announced officially on Friday.
US President wants a quick return to open the US economy to stop the labor market bleeding he has always boasted about. Before the epidemic, US unemployment was about the lowest in 50 years.
According to gold technical analysis: Gold stability around and above the $1700 resistance will continue to support the bulls' control of performance for a longer period and pave the way to test new record highs, with the closest ones currently are 1715, 1725 and 1755, respectively. Completing the current correction may push gold into new buying areas that investors will push higher after announcing the expected US data.
Today's gold price will react to the announcement of Chinese data, the announcement of the monetary policy of the Bank of England and then the unemployed claims from the US.
