Gold Sustain Above $1700 as the US Faces Unemployment Shock

Gold started the week with a bearish pressure, but bulls are still optimistic. Gold sustain above $1700 area as the U.S. economy faces historic unemployment shock. What are the charts and technical indicators are saying? Read more to find further insights into today’s XAU/USD Technical Analysis.

April 27, 2020 | AtoZ MarketsGold is currently trading around $1715 area and trying to push the price down. The price broke below the dynamic levels on the intraday chart but holding by the Kumo cloud. As per the current scenario, XAU price may decline further before continue to recover higher in the coming days.

Gold Sustains Bullish Pressure as the US Continues Stimulus Packages

Gold futures rose by 0.23% at $1739.60 by 3:25 AM GMT as it reversed its earlier drawdown. XAU saw falls on the previous session as investors are carefully cashing out of their positions in the Gold as the Asian stocks recorded gains. Moreover, many analysts expect that Gold will continue to benefit from the continuous stimulus packages provided by central banks to prevent Coronavirus pandemic economic impact.

Furthermore, Tai Wong, BMO head of Base and Precious Metals Derivatives Trading, told CNBC, "Gold is holding well near highs of the move as both retail and institutional investors have been consistently buying as global balance sheets have ballooned, and the outlook for the global economy remains extremely uncertain."

On the other hand, the U.S. economy facing historic shock with 16% unemployment possible as Donald Trump advisor says. Moreover, Kevin Hassett, said in an interview, "It's a grave situation. This is the biggest negative shock that our economy, I think, has ever seen. We're going to be looking at an unemployment rate that approaches rates that we saw during the great depression of the 1930s."
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He also added, "I think the unemployment rate is going to jump to a level probably around 16 per cent or even higher in the next jobs report. Besides, I think the next couple of months are going to look terrible. You're going to see numbers as bad as anything we've ever seen before. We're going to need really big thoughtful policies to put together to make it so that people are optimistic again."

XAU to Reach $1800 Area in the Coming Days?

According to the daily chart, Gold is currently residing near $1715 area and trying to decline. Gold sustain above $1700 area indicates that bulls are still holding their position in the market. As per the current price action, XAU bears may push the price down towards $1700 again before continue to recover higher. So, if the price pushes lower and Gold sustain above $1700 with a daily close, the bulls may push the price higher towards $1800 in the process.

Gold Sustain Above $1700 as the U.S. Economy Faces Historic Unemployment Shock

Image: Gold Daily Chart

Furthermore, the dynamic level of 20 EMA is currently residing below the price, along with the Kijun line and Tenkan line. The dynamic levels may act as strong support to push the price higher. Along with, the MACD lines are residing above 0.00 level and may have a bearish intersection. Besides, the histogram is also slopping down gradually. Both are indicating bears may continue the bearish momentum for a short period.

To conclude, Gold sustain above $1700 indicates that investors are still optimistic with the safe haven amid this Coronavirus pandemic. An impulsive daily close is needed to find the definite momentum in the coming days. 

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