- Gold price followed a declining path below $1225 against the US Dollar, and may continue to weaken.
- The price is currently trading below a crucial bearish trend line with resistance at $1222 on the hourly chart.
- Today, the US Initial Jobless Claims for the week ending May 6 released by the US Department of Labor posted a decline from 238K to 236K.
Gold Price Technical Analysis
In the last analysis, we discussed as long as Gold price is below the $1235-36 resistance, there is a risk of further declines in the near term towards $1220.
The price did move down, and not only tested $1220, but also broke it for a new low. It traded as low as $1214.27 where it found support and recovered.
The price moved above the 23.6% Fib retracement level of the last decline from the $1236 high to $1214 low.
Gold Price Hourly Chart
However, the upside move found resistance near a crucial bearish trend line with resistance at $1222 on the hourly chart.
The trend line resistance is just below the 50% Fib retracement level of the last decline from the $1236 high to $1214 low.
So, the price is clearly struggling, and may soon break down for yet another downside move towards $1215 as long as sellers remain in action.
US Initial Jobless Claims and PPI
Today in the US Initial Jobless Claims figure for the week ending May 6 was released by the US Department of Labor. The market was expecting an increase from 238K to 245K.
The actual result was well above the market forecast, as there was a decline in the Initial Jobless Claims from 238K to 236K. The report added that the “4-week moving average was 243,500, an increase of 500 from the previous week’s unrevised average of 243,000“.
The US Producer Price Index for April 2017 was also released today by the Bureau of Labor statistics, Department of Labor. The market was expecting an increase of 0.2% in the PPI in April 2017, compared with the previous month.
The actual result was better, as there was an increase of 0.5% in the PPI.
Overall, there can be an increase in bearish pressure for Gold price, and it may move down back towards $1215 and could even break it.