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Gold Daily Outlook - Double top pattern moves gold to support level of $ 1.713; What's next?

Have a nice Friday, dear traders.

Precious metals prices closed at 1721.00 after hitting a high of 1738.00 and a low of 1716.85. Gold prices rose in the first half of the day and hit a week-high on weak US inflation data that put pressure on government bond yields and the US dollar index.

On Thursday, U.S. President Joe Biden signed the $ 1.9 trillion incentive bill saying he would instruct U.S. states to qualify all adults for the coronavirus vaccine by May 1. He also urged Americans to remain vigilant against the virus.

Biden warned Americans that more pain and death should be caused by the virus, which has already cost 530,000 lives in the United States - the highest death toll in any country. The restrictions to contain the coronavirus effect have cost millions of jobs in the United States alone. Biden also said that approximately 10% of the American population has been fully vaccinated and that the US will have sufficient vaccine supplies to vaccinate the entire population by the end of May. He ordered states, territories, and tribes to qualify all adults to receive a coronavirus vaccine by May 1.

Hopes and optimism for a swift recovery in the US economy grew after Biden commented that all Americans would be given vaccine doses by the end of May. This means that after another two and a half months, the United States could resume its pre-pandemic lifestyle. Those hopes increased the market's risk flows and therefore yellow metal suffered more as a safe investment and fell on Thursday.

Gold is seen as a hedge against inflation through widespread stimulus measures. However, higher bond yields have threatened this status as they result in higher opportunity costs for holding gold bars. After the US president signed the US stimulus plan, the US dollar began to fall and gold prices benefited, rising to a week-long high. However, yellow metal gains couldn't live better than expected US macroeconomic data for the third session after the release of US macroeconomic data.

On the data front, the federal budget balance at 12:00 GMT showed a deficit of -310.9 billion versus an expected -298.6 billion, supporting the US dollar and adding losses in precious metals prices. At 18:30 GMT last week's unemployment claims fell to 712,000 from the expected 730,000, supporting the US dollar and adding further bearish momentum to gold. At 8:00 p.m. GMT, JOLTS job vacancies increased 6.92 million from the expected 6.65 million, supporting the US dollar and adding to further losses.

Daily technical levels

Support resistance
1712,56                     1733,71
1704,13                     1746,43
1691,41                     1754,86
Turning point: 1725.28

GOLD continues to trade on a bearish trend from 1,712 and shows a bearish decline below the resistance level of 1,722. On the higher side, a bullish crossover of 1,732 can extend the further buying trend to the 1,748 level. The precious metal recently passed the 50 EMA periods, indicating a bearish trend. Today sales can be seen at 1,712 to 1,700 and 1,690. MACD and RSI support a sales trend today; Therefore, the precious metal can go further down by 1,700. Good luck!

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.