Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
James Hyerczyk

Gold posted a wicked two-sided trade on Thursday, first plunging to its low of the session following the release of the U.S. Non-Farm Payrolls and weekly initial claims reports then surging to its high of the session as demand for higher risk assets started to weaken.

The U.S. Non-Farm Payrolls report was perceived as bullish because the payrolls change and unemployment rate came in better than expected. This triggered the sell-off in gold because it dampened the need for additional stimulus from the government and the Federal Reserve.

Know where Gold is headed? Take advantage now with 

75% of retail CFD investors lose money

After some thought, traders determined that the weekly initial claims report was potentially bearish for the economy because it represents the future, while the NFP report is old news. If COVID-19 cases continue to rise and the U.S. starts to shut down parts of its economy then initial claims will rise. Investors will start shedding equities and gold will probably go up. Additionally, a weak jobs market will prompt the Fed to take stimulus action and maybe the government will kick in additional stimulus. Both moves will be potentially bullish for gold prices.

On Friday, August Comex gold settled at $1790.00.

Daily August Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is showing signs of shifting to the downside with the formation of the closing price reversal top on July 1.

A trade through $1807.70 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through $1754.00.

The minor range is $1754.00 to $1807.70. Its 50% level or pivot at $1780.90 is controlling the near-term direction of the market. Closing above this level makes it support early Monday.

The short-term range is $1671.70 to $1807.70. If the short-term trend changes to down then look for a break into its 50% level at $1739.70.


Short-Term Outlook

On the daily chart, trader reaction to $1780.90 will likely determine the near-term direction of the market. Fundamentally, risk sentiment will be the catalyst behind the next move. The risk sentiment will be driven by the economic data, the most important being the Weekly Initial Claims report.

The Weekly Jobless Claims report will be the key report to watch because it’s weekly, while the other major reports are monthly. It will be the earliest indicator of problems in the economy.

For a look at all of today’s economic events, check out our economic calendar.
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.