Poor US Jobless Claims Bolster Gold Appeal

Poor US Jobless Claims Bolster Gold Appeal

Gold’s safe-haven appeal was renewed yesterday after the weekly US Jobless Claims persisted close to the two million levels, indicating that the economic consequences from the COVID-19 pandemic will not be alleviated easily.

US gold for August delivery rose by 1.3% to record $1,724.40/oz on New York’s Comex following the Labor Department’s report that an additional 1.9 million Americans filed for unemployment for the first time last week, bringing the total number of citizens rendered jobless by the pandemic to about 43 million since March.

Spot gold, the measure for real-time bullion trades, gained more than 1% and reached a high of $1,721 in yesterday’s session.

An analyst at New York’s OANDA, Ed Moya, said that initially there were high hopes for a strong US economic recovery, however, this week’s data has derailed that expectation. He added that the NFP data set to be released today will shed more light on the damage that occurred in the labor market last month. Ed ended by saying that the labor market will recover, regardless of how slowly, but it will be helpful if the baseline unemployment rate doesn’t go above 20%.

XAUUSD – Daily Chart

Gold (XAU) Value Forecast — June 5

XAU/USD Major Bias: Bullish

Supply Levels: $1,722, $1,730, and $1,745

Demand Levels: $1,700, $1,690, and $1,685

Gold (XAU/USD) has completed the first projected wave, hitting $1,721.48 before reversing. We are likely to see the price of gold hit the $1,702 level before we proceed on another bullish wave to $1,730. However, the NFP data release set for a few hours will be the determining factor for XAU/USD price action in the short-term.

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