Gold Plunges As US Jobless Claims Drop to Lowest Level Since 1973

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Gold fell sharply yesterday during the US session after a labor department’s report showed that the Jobless claims unexpectedly decreased to the lowest level since 1973, indicating the U.S. labor market remains a pillar of support in the world’s largest economy. The technical bias however remains bullish because of a Higher High in the recent upside rally.

Technical Analysis

As of this writing, the yellow metal is being traded near 1246. An immediate support is being noticed around 1243.00 ahead of 1237.00, both are key horizontal levels ahead of 1223.00, the swing low of the last major downside move on the four-hour timeframe.

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On the upside, the precious metal is likely to face a hurdle near 1258.00 ahead of $1270, the swing high of last major upside rally as well as a key horizontal resistance as demonstrated in the above chart. The technical bias will remain bullish as long as the 1223.00 support area is intact.

US Jobless Claims

New applications for unemployment benefits fell by 6,000 to 247,000 in the week ended April 16, data from the Labor Department showed Thursday. The median forecast of economists surveyed by Bloomberg called for 265,000 claims. The number of Americans already on benefit rolls declined to a more than 15-year low. Limited dismissals signal that employers are still optimistic about the U.S. demand outlook. The drop in claims occurred in the same week the Labor Department surveys for the monthly employment report, and economists are banking on further job growth to support consumer spending and help prop up economic growth after a weak first quarter.

Trade Idea

Considering the overall technical and fundamental outlook, selling the precious metal on rally towards $1258.00 could be a good strategy in short term.

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