Gold Weekly Outlook

Ichimoku Analysis (Weekly chart)

Tenken-Sen- $1945.43

Kijun-Sen- $1873.13

Gold prices declined more than $50 after the upbeat US Non-farm payroll. The US economy added 253000 nonfarm payrolls in Apr, well above the estimated 181000. The unemployment rate dropped to 3.40%, the lowest level since May 1969. Average hourly earnings rose to 4.4% from 4.2%. It hits a low of $1999 and is currently trading around $2025.

The European central bank hiked rates by 25 bpbs as expected to 3.75%. It says that the inflation outlook stays "too high for too long". The number of people who have filed for unemployment benefits rose by 13000 to 242000 in the week ending Apr 29th, compared to a forecast of 240000.

Major economic data

May 10th, 2023 US CPI m/m (12:30 pm GMT)

May 11th, 2023 BOE Monetary policy (11 am GMT)

US PPI (12:30 pm GMT)

Unemployment benefits (12:30 pm)

May 12th, 2023, Prelim UoM Consumer Sentiment (2 pm GMT)

US dollar index- Bearish. Minor support around 100.80/100. The near-term resistance is 101.60/102.40.

According to the CME Fed watch tool, the probability of a no-rate hike in June increased to 90.40% from 64.6% a week ago.

The US 10-year yield jumped more than 5% despite strong US nonfarm payroll. The US 10 and 2-year spread narrowed to -41% from -108%.

Factors to watch for gold price action

Global stock market- bullish (negative for gold)

US dollar index - Bearish (positive for gold)

US10-year bond yield- bearish (positive for gold)

Technical:

The near–term support is around $2000, a break below targets of $1970/$1955/$1935.The yellow metal faces minor resistance around $2070, and a breach above will take it to the next level of $2100/$2150.

It is good to buy on dips around $1970 with SL around $1950 for TP of $2070/$2100.