Daily Brief, Jun 9: Everything You Need to Know to Trade Gold Today
Arslan Butt • 2 min read
Good morning, traders.
Gold prices closed $1697.99 after placing a high of $1700.62 and a low of $1677.39. Overall the movement of gold remained bullish throughout the day. GOLD on Monday made a surprising return to the 1700 level after the previous session’s fall to a one-month low, and buyers started to take advantage of the lower price of the yellow metal. However, the safe-haven demand was flat due to the prevailing effects of US employment jump in the market, which raised hopes for quicker economic recovery.
Gold rose about 1% higher on the day above $1700 level after the US data showed that NFP increased by more than 2.5M in May, which were previously expected to post 8M job loss. The unexpected increase in the number of jobs raised the risk appetite in the market and raised demand for stocks and riskier assets.
Market participants will now keep looking towards the US Federal Reserve’s two-day policy meeting, which will end on Wednesday. After the surprise recovery in employment, investors have stopped pricing in the possibility of negative interest rates by the Fed.
On the other hand, China demanded proof from Rick Scott on accusations that Beijing was trying to impede the development of coronavirus vaccine by Western countries. On Sunday, Scott claimed that China was sabotaging the progress of the development of a potential vaccine, but he did not provide any detail about the source of this information and said that it came from the intelligence community.
Last month, Scott and the other 6 Republican senators introduced a bill to prevent China from stealing American COVID-19 vaccine research data. The FBI also said that it was investigating the attempts from Chinese hackers who targeted the US groups conducting COVID-19 related research.
Speaking of US-China tussle, there was a report suggesting that China was poised to launch a digital version of its currency – Yuan. This could create serious problems for the US banking systems and possibly force the US to digitalize the dollar to compete. There was no macroeconomic data to be released by the US on Monday, and hence gold moved according to the market participants’ mind who decided to take advantage of cheaper gold prices.
Daily Technical Levels
Gold traded bullish to place a high around 1,704 level but fell as the demand for safe-haven assets faded amid stronger US dollar fundamentals. At the moment, gold is supported above 1,696, which can lead prices towards 1,706 levels. Above 1,706 level, prices may soar further higher until 1,712 level.