Daily Brief, Jun 8: Everything You Need to Know About Gold Today

Posted Monday, June 8, 2020 by
Arslan Butt • 2 min read

Good morning, everyone.

Gold prices closed at $1685.19 after placing a high of $1716.13 and a low of $1670.76. Overall the movement of gold remained strongly bearish that day. GOLD fell on Friday amid the increased risk-on sentiment after the release of US job reports and decreased demand for safe-haven assets due to rising optimism of faster economic growth.

The stronger than expected labor market report took the money out of safe-havens and flood back into risk assets, which ultimately moved the yellow metal prices towards the lowest level since May 1. The jobs report from the US Bureau of Labor Statistics showed that employment levels were still only where they were back in 2011. However, it proved as good news for the country because instead of losing jobs, people were hired back during the last days of May. Whereas, the data of unemployment claims from the last week of May was reported at a high rate.

This report increased the risk sentiment of the market, and the US 10-year Treasury yields rose by 11 basis points to 0.93% and raised the US dollar strength, which eventually weighed on gold on Friday.

At 17:30 GMT, the Average Hourly Earnings were dropped to -1.0% from the expected 1.0% in May and weighed on the US dollar. The long-awaited Non-Farm Employment Change showed that 2.509M Americans got jobs in May, whereas 7.750M were expected to lose jobs instead. The Unemployment Rate, which was expected to rise by 19.4%, was reported as 13.3% in May and supported the US dollar. The risk appetite was already strong after the ECB announced an additional 600 billion euros for its emergency bond-buying program on Thursday.
On the other hand, China defended its action towards coronavirus pandemic in a lengthy report published on Sunday. China defended that it had provided information in a timely and transparent manner. According to that report, the Chinese government did not delay or cover up anything, and instead it provided immediate reports of virus data and all relevant information about the pandemic to WHO and the international community. It played an important role in contributing to prevent and control the epidemic around the world. The government report included a detailed timeline of the series of Chinese government’s actions in which China began to update WHO regularly from January 3 and to the US CDC head from January 4.

However, coronavirus deaths crossed 400,000 worldwide on Sunday, and US senator Rick Scott accused China of trying to block the development of a vaccine in the west. He said that there was evidence through the US intelligence community that China was trying to sabotage the progress of vaccines from the US, England, and Europe. He held back from providing any details about the source of this accusation and said that China did not want them to make the vaccine first. He also said that if England or the US will succeed in making the vaccine first, they will share it, but if China makes it first, it will not share the vaccine.

Daily Technical Levels
Support Resistance
1707.86 1737.96
1688.33 1748.53
1677.76 1768.06
Pivot Point: 1718.43

The precious metal gold fell sharply to place a low of 1,671 level in the wake of positive NFP data. However, now it’s heading north to complete 38.2% Fibonacci retracement at 1,689 level. Today, the bullish crossover of this level may drive more buying until the next target level of 1,692, which marks a 61.8% Fibonacci level for gold. Gold may find immediate support around 1,684 level. Bullish bias seems stronger today.

Good luck!

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
Safe havens such as Gold and the JPY have been taking advantage of the financial troubles with the ban king system and lower FED rate odds
9 hours ago
0 0 vote
Article Rating
Notify of
Inline Feedbacks
View all comments