Gold Recovers To 1,750 USD
07 July 2022
The bullion is having one of its worst weeks in a long time, down 4% on the week and trading at nine-month lows near 1,750 USD as commodities remain under severe selling pressure due to mounting fears of a strong global recession.
Weak macro data
The number of Americans who submitted their first jobless claim increased to 235,000 last week from 231,000 the week before. Now at 232,500, the 4-week average is at its highest level since the first week of December.
Additionally, continued claims have risen more quickly (from 1.324 million to 1.375 million last week - well above the 1.328 million expected).
Real GDP growth in the second quarter of 2022 is presently predicted by the GDPNow model of the Atlanta Federal Reserve to be -2.1 percent, which, when added to the 1.6 percent decline in Q1, would be enough to trigger an unofficial recession. The official reading of the second quarter's GDP is scheduled for July 28.
Below strong resistance
The following key resistance could be at previous lows near 1,765 USD, and as long as the metal trades below it, the medium-term trend seems bearish.
However, as usual with gold, we might see a strong rally above that level as gold is one of the best-known assets for its fake signals.
On the other hand, the support now stands at this week's lows of 1,735 USD, and if broken to the downside, we might see a quick sell-off toward 1,700 USD.