Gold corrects to dip below $2000

The rise of the US dollar index has put pressure back on the shiny metal

By Raed Alkhedr | @raedalkhedr | 10 April 2023

Gold- technical analysis (1)
  • US labor market data declining on Friday has putting pressure on the precious metal

  • The psychological level near $2,000 remains a strong support

Gold prices retreated below the $2,000 level again at the start of the week

Data released at the end of last week showed that the US labor market added 236,000 jobs, which was better than the expected 228,000 jobs, but lower than the previous reading of 311,000 jobs. Meanwhile, unemployment rates fell to 3.5%, compared to the previous reading of 3.6%.

On the trading front, gold prices opened the first session of the week with a drop this morning as the precious metal traded near the $1,994 level, declining 0.70%. The drop in gold prices was largely driven by the latest labor data. Reflecting strength in the US economy strong, and continuous job creation.

This week, Markets are focused on several important economic data releases, including the US Consumer Price Index, as well as the results of the US Federal Reserve meeting, which is scheduled to be released on Wednesday.

The most influential pivot levels affecting gold movements are as follows

After gold managed to surpass the resistance level of $1,990.00, which represented the upper limit of a symmetrical triangle pattern, it rose to the level of $2,032.00 and then retreated slightly to retest the $1,990.00 level. This level turned into strong support for gold and managed to maintain it.

It is likely that gold will maintain the support level of $1,990.00 and may rebound and rise to test the peak of $2,032.00. If it manages to surpass this level, it may extend the rise of gold to levels of $2,050.00. If gold continues to rise and surpasses this level, it may test the historical peak of gold at $2,070.00.

However, if gold retreats below the $1,990.00 level, it is likely to extend its decline to test the support level of $1,975.00. If it breaks this level, its decline may extend to the level of $1,950.00.

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