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Gold futures are inching higher on Friday amid flat U.S. Treasury yields and a reversal to the downside in the U.S. Dollar after it briefly penetrated a nearly 19 year high. Volume is light, however, ahead of the release of key U.S. employment data later in the day.
At 09:28 GMT, June Comex gold futures are trading $1882.10, up $6.40 or +0.34%. On Thursday, the SPDR Gold Shares ETF (GLD) settled at $175.19, down $0.61 or -0.35%.
Factors Affecting the Trade
Gold is being underpinned by flat 10-year U.S. Treasury yields, following a surge the previous session. Nonetheless, the U.S. benchmark remains near its recent high at 3.07%, ahead of the release of a key payrolls report. The 10-year rate surged as high as 3.1% on Thursday, its highest point since 2018.
The U.S. Dollar is trading lower against a basket of major currencies after trending higher earlier in the session. The move is likely being fueled by position-squaring ahead of the jobs report.
Economic News
On Thursday, a labor productivity report for the first quarter showed worker output had fallen at the fastest pace since 1947, while weekly unemployment insurance claims also came in slightly higher than expected.
April’s nonfarm payrolls report, due out at 12:30 GMT on Friday, is likely to be even more closely watched by investors. Economists surveyed by Dow Jones expect employers added 400,000 jobs to nonfarm payrolls, down slightly from 431,000 in March. The unemployment rate is expected to fall to 3.5% in April, down from 3.6% in March, according to Dow Jones.
Higher wage growth data from this report, in particular, could provide more evidence for the Fed to lean into its aggressive tightening of monetary policy. It could drive gold prices lower.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1849.70 will signal a resumption of the downtrend. The main trend will change to up on a trade through the last main top at $2003.00.
The minor trend is also down. A trade through $1910.70 will change the minor trend to up. Taking out the next minor top at $1921.30 will reaffirm the shift in momentum.
The minor range is $1849.70 to $1910.70. The market is currently straddling its pivot at $1880.20.
The next resistance is a pair of retracement levels at $1897.70 and $1908.10. This is followed by 1932.90.
Daily Swing Chart Technical Forecast
The direction of the June Comex gold futures contract into the close on Friday is likely to be determined by trader reaction to the 50% level at $1880.20.
Bullish Scenario
A sustained move over $1880.20 will indicate the presence of buyers. This could trigger a surge into a series of potential resistance points including a short-term Fib level at $1897.70, a long-term 50% level at $1908.10, a minor top at $1910.70 and another minor top at $1921.30.