· Gold eased on Friday as investors booked profits after a 1% rise in the previous session, but weak economic data from the United States and Europe due to the novel coronavirus kept bullion on track for a weekly gain.
Spot gold slipped 0.4% to $1,724.05 per ounce by 0619 GMT, but was up over 2.3% for the week so far.
Prices hit a more than one-week high of $1,738.58 on Thursday, bolstered by hopes of more stimulus from the United States, especially after jobless claims soared to a record 26 million in the past five weeks.
U.S. gold futures were little changed at $1,745.10 per ounce.
· "We've seen a little bit of a pullback on gold just because it was such a big rally last night," IG Markets analyst Kyle Rodda said.
· Asian shares and U.S. stock futures fell, spurred by doubts about progress in the development of drugs to treat COVID-19 and new evidence of U.S. economic damage caused by the pandemic.
· The dollar held close to a more than two-week high touched on Thursday, limiting appetite for gold.
· The U.S. House of Representatives overwhelmingly approved a $484 billion coronavirus relief bill on Thursday, funding small businesses and hospitals and pushing the total spending response to the crisis to an unprecedented near $3 trillion.
· European Union leaders agreed to build a trillion-euro emergency fund to help recover from the pandemic.
· While profit-taking weighed on gold, "the continuation of global central bank stimulus will be supportive for bullion as real rates remain negative", Stephen Innes, chief market strategist at financial services firm AxiCorp, said in a note.
· Gold, considered a safe store of value during economic or political uncertainties, tends to benefit from widespread stimulus measures from central banks since it's seen as a hedge against inflation and currency debasement.
The outbreak has pushed governments and central banks around the world to unleash unprecedented fiscal and monetary support for economies.
· Economic activity in the euro zone all but ground to a halt this month as the coronavirus sweeping across the world forced governments to impose lockdowns and firms to down tools and shut their businesses, a survey showed.
· Among other precious metals, palladium rose 0.4% to $1,988.17 an ounce, but was on track to post its fourth straight weekly decline.
· Platinum rose 1.0% to $762.35 per ounce, while silver fell 1.0% to $15.15 per ounce.
· Gold Price Prediction – Gold Prices Rally and are Poised to Break Out
Technical analysis
Gold prices surged higher rising 0.8% and closing at a 7-year high. The next level of target resistance is the April high at $1,747. After that level, gold could rally to $1,921. A break of this 2011 level would lift gold into blue sky territory. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal in the middle of the neutral range. The RSI moved higher in tandem with price action reflecting accelerating positive momentum. The MACD (moving average convergence divergence) index stabilized and started to accelerate higher which reflects accelerating medium-term momentum.
· Gold Price Analysis: Slips below weekly support trendline, but still above $1,700
Gold prices drop to $1,722.80, down 0.45% on a day, during the Asian session on Friday. The bullion recently broke the weekly rising support line, now resistance.
As a result, sellers can aim for a 200-HMA level of $1,707 if they manage to dominate below Wednesday’s top surrounding $1,718.75.
In a case where the precious metal remains weak under 200-HMA, $1,700 and $1,698/97 can entertain the bears ahead of recalling the weekly bottom near $1,661.
Alternatively, an immediate falling trend line from Thursday’s top, at $1,730.50 now, may question the recovery moves beyond the support-turned-resistance line of $1,726.
If at all bulls manage to keep the helm beyond $1,730.50, odds of them refreshing the seven-year high above $1,748 can’t be ruled out.
Reference: Reuters, FX Street, FX Empire
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