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  • Gold trades just 0.19% higher on Friday despite poor data from the US.
  • The price has stalled ahead of a key trendline shown on the chart below.

Fundamental backdrop

The jobs market in the US is in a state of chaos at the moment with another record print for weekly jobless claims and a record matching 701K non-farm payroll number this afternoon. It has to be said the data was for March but missed out the last two weeks of initial jobless claims due to the cut off period. This means that the true numbers may be reflected in next months reading. 

There is still a massive amount of central bank and government stimulus around. Germany are increasing support for small to medium-size business but are yet to finalise arrangements with some reports suggesting the figure could be as high as EUR 500 billion. 

In terms of COVID-19 news, the rate of change in Italy and Spain seems to be slowing as the world passes the 1million mark. The US has surpassed 200 thousand cases to become the worlds worst affected nation. What is interesting is the fact that and Larry Kudlow (Director of the United States National Economic Council) said that the US would not reopen until the US are satisfied on the health side. 

Technical picture (4-hour and weekly chart)

The chart below is showing that the gold price is attempting to break the red trendline on the chart. this level seems significant but not as significant as the USD 1644.54 per ounce wave high marked by the blue line. A break of these two levels will tell us lots about the macro environment and how badly investors are rushing for safe-haven assets. There are many plus points for the precious metal as it continues to trade above the moving averages on the 4-hour, daily and weekly charts. The RSI is also above the 50 mid-line on all of these timeframes too. 

For next week the blue and the black support and resistance zones will be key. In these times of economic uncertainty, the blue level at USD 1644.54 is the more important one. If this breaks then we could look forward to the test of the USD 1700 zone. 

Gold breaking trendline

Weekly chart

The weekly chart illustrates the highs and consolidation zone we are currently in. The red line is the next key area that could be tested close to USD 1800. Under that, USD 1533.00 is the support zone but the 4-hour chart shows USD 1500 has already been rejected. These are much longer term level but just need to be looked at from time to time for reference purposes.

Gold weekly test of highs