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* Cooling Labor: The price of gold resumed its upward movement and climbs more than 1% following weak US jobless claims data and falling US Treasury yields, dampening demand for the US dollar. The US Department of Labor revealed that Initial Jobless Claims for the week ending May 4 climbed to 231,000, surpassing the projected 210,000 and marking an increase from the previous week’s 209,000. This rise in jobless claims indicates a slowdown in the US labor market. Weaker labor market data from the US, with an increase in the number of Americans filing for unemployment benefits exceeding expectations, suggests a potential for a Federal Reserve rate cut despite inflationary pressures. The Federal Reserve, which is prioritizing full employment and inflation, may consider adjusting its monetary policy following this data release. As a result, the likelihood of a rate cut by the end of 2024 increased from approximately 33 basis points to 38 basis points.
* Technical Breakout: Gold price was traded higher following prior breakout above the previous resistance level 2343.50. MACD which illustrate bullish momentum signal suggest the commodity to further extend its gains.
* Resistance and Targets: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 2400.50. Conversely, a potential correction is also to be expected and the price could head back towards the level 2270.00 after it breaks back below the level.
Understand how technical analysis can help you in this trading opportunity.
Moving ahead, the market will remain attentive to economic data releases from the US and the potential trajectory of global central banks, including the Federal Reserve (Fed). While several central banks are indicating a readiness to cut interest rates, the Fed stands out as a major central bank that has not yet signaled such intentions.
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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.
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