The stability of the price of gold above the psychological resistance of $ 1900 will support the uptrend.
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The return of the weak US dollar helped the gold price kick off positively in this week’s trading, again reaching the psychological resistance level of $ 1900. The recent gains in the dollar have been a good reason for a downward movement in the price of gold to the support level of $ 1,855, and before reaching that support we have recommended buying from the support level of $ 1858 and indeed it has reached the entry level and the recommendation has reached the current gains.
Gold resumed gains after US jobs data beat expectations, easing fears that a strong economic recovery could fuel inflation and see demand return. At the end of last week, an official report showed a rebound in employment growth in the United States during the month of May, although the gain in non-farm payrolls of 559,000 jobs was lower than expectations of economists. The US unemployment rate fell to 5.8%, while the work participation rate was little changed.
Investors were reacting to recent statements by US Treasury Secretary Janet Yellen ahead of the start of negotiations this week, in which she confirmed that US President Joe Biden was pursuing spending plans amounting to $ 4 trillion, even though this leads to continued high inflation until next year. . Most notable of his statements was that the âslightly higherâ interest rate environment would be beneficial.
The price of an ounce of gold could remain at the psychological level of $ 1900, as the market’s prolonged monitoring of inflation levels in the United States increases speculation as to whether the Federal Reserve will begin talks on the idea. reduce its massive bond purchase program. Commenting on this, Loretta Meester, Chairman of the Cleveland Federal Reserve, recently said monetary policy makers should “be deliberately patient” and wait to see more evidence that the US labor market has made further progress before d ” consider reducing their asset purchases. .
The head of the World Health Organization urged leaders of G7 countries to help the United Nations-backed COVID-19 vaccination program improve access to doses in developing countries. As G7 leaders meet in Cornwall, England later this week, WHO Director-General Tedros Adhanom Ghebreyesus once again called on rich countries to do more to tackle inequalities in access to coronavirus vaccines.
Tedros recently announced his goal of vaccinating at least 10% of the population in each country by the end of September and 30% by the end of the year. To meet these goals, Tedros added, the United Nations needs hundreds of millions of doses of vaccine in June and July, and 250 million more doses by September.
“These seven countries have the potential to achieve these goals,” said Tedros, awaiting a summit of leaders from Britain, Canada, France, Germany, Italy, Japan and the United States. âI call on the G7 not only to commit to their participation, but to commit to their participation in June and July.
He also warned countries facing outbreaks of new variants such as the so-called delta variant – which first appeared in India – against lifting COVID-19 restrictions too quickly, saying it “could be disastrous. for those who are not vaccinated â.
Technical analysis of gold:
The stability of the price of gold above the psychological resistance of $ 1900 will support the uptrend. Nonetheless, this offers cautious buying opportunities, as the above gains move technical indicators to solid overbought levels and therefore the price of gold may be exposed to profit taking at any time. The closest targets for bulls are $ 1,919, $ 1,928, and $ 1,945.
On the downside, gold will break out of the current trend if it returns to the support level of $ 1,855 again.
The price of gold will be affected today by the strength of the US dollar, US bond yields and the extent of the market’s risk appetite, as well as the interaction with the growth rate announcement. the Japanese economy and the euro. There will also be a reading from the German ZEW Economic Sentiment Index.