Gold Plunges after US Job Data
Gold inched lower on Friday, decreasing the price of yellow metal to less than $1250.00 an ounce amid some key economic releases. The technical bias remains bullish because of a higher low in the recent downside move.
Technical Analysis
As of this writing, the precious metal is being traded near $1231 an ounce. A support may be noted around $1229, the trendline support area as marked with brown color in the given below daily chart. A break and daily closing below the $1229 support shall incite renewed selling interest, opening door for a move towards $1180, the low of 27th January.
On the upside, the precious metal is likely to face a hurdle near $1260, an immediate resistance ahead of $1278, the upper trendline resistance area as demonstrated with red color in the above chart. The technical bias shall remain bullish as long as the $1180 support area is intact.
US Jobless Claims
The number of Americans filing for unemployment benefits fell to near a 44-year low last week, pointing to further tightening of the labor market even as economic growth appears to have remained moderate in the first quarter.The stronger labor market and rising inflation could push the Federal Reserve to raise interest rates this month. Several Fed officials have in recent days suggested the U.S. central bank could increase borrowing costs soon. Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 223,000 for the week ended Feb. 25, the lowest level since March 1973, the Labor Department said on Thursday.
Trade Idea
Considering the overall technical and fundamental outlook, selling the precious metal can be a good strategy if Trump hints are major fiscal reforms in today’s speech.