Gold Down Below $1,300, Lowest Jobless Claims in almost 50 years

Gold and silver are posting big declines on Thursday as investors cheered good news in both sides of the Atlantic ocean. DXY up on the day.
Mauricio Carrillo
Gold Down Below $1,300, Lowest Jobless Claims in almost 50 years

Gold is trading down on Thursday as investors are welcoming news about a possible US-China trade agreement in the upcoming months.

US Treasury Secretary Steven Mnuchin said in an interview that both countries have “pretty much agreed.”

Traders also welcomed news about Brexit as European Union leaders and the British Prime minister Theresa May reached an agreement for a “flexible extension” of the United Kingdom departure from the Union until October 31.

Lowest unemployment claims in 50 years in the United States

On the other side of the Atlantic, the United States reported higher than expected Producer Price index in March with a 0.6% monthly increase. The double of the 0.3% expected by the market.

Year over year, PPI accelerated to 2.2% in March from 1.9% posted in February.

Higher producer prices could motivate the Federal Reserve to reconsider its no-hike stance in interest rates.

On the labor market, the US saw 196K initial jobless claims signed on the April 5 week. Well below the 211K expected by the market and its lowest number of Americans filing applications for unemployment benefits since 1969.

DXY rallies over good news

The Dollar index is jumping on Thursday as investors are welcoming several good news with equities trading higher too. The dollar index is on its way of recovering the last two days of declines.

Currently, the DXY is trading 0.22% positive at 97.13. The unit is consolidating levels above the 97.00 mark.

Technical indicators suggest more room for the upside and moving averages are aligned to the north.

Gold down below $1,300, time for a reversal?

XAUUSD daily chart Gold April 11

Gold is trading negative on Thursday as the Dollar is posting daily gains and investors are willing to take risks amid good news in both sides of the Atlantic.

XAU/USD is currently trading at 1,296, 0.85% down on the day as the pair was unable to break above the 1,310 level. It is now below the 1,300 area.

The metal is now facing the 1,295 support that is containing the short-term bearish trend. Below there, the next support is located at 1,280.

Silver dangerously approaches to critical support

XAGUSD daily chart Silver April 11

Silver is trading 1.40% down on Thursday as the unit lost the 15-20 level and stop losses triggering fueled the decline. Also, a strong dollar and a correlation with gold are pushing the Silver down.

XAG/USD is currently testing the critical 15.00 area. A break below there would open the door for testing of the April 4 low at 14.90. Then, the range between 14.50 and 14.80 will be waiting for the pair.

Technical indicators suggest more dovishness and a set of stop losses below the 14.90 area could push the metal even deeper.

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