Gold resumed its downward correction as it opened this week’s trading on a notable decrease, in addition the price lost positive momentum, where the simple moving average 9 provides negative signals as the price moves below it on the 4-hour chart.
Meanwhile, gold is trading beneath the weekly pivot point at $3660, looking forward to retesting the first support level at $3220. A sustained move below it may push prices to resume their downward correction near the second weekly support level of $3120.
On the flip side, if gold manages to break above the weekly pivot point at $3660, it may help prices to rebound toward $3460. A break above the aforesaid level may drive prices to achieve a new historical high at $3600.
On the economic data front, investors are waiting for key economic data later this week, particularly U.S. non-farm payrolls for April, with expectations referring to a slowdown in hiring pace to 140,000, compared to a job gain of 228,000 in March. Positive data will probably support the dollar and pressure gold, while the opposite is true.
In addition, U.S. Core Personal Consumption Expenditures index, the Federal Reserve’s favorite inflation measure, will be carefully watched. Analysts expect annual Core PCE inflation to drop from 2.8% to 2.5%. A higher-than-expected reading could prompt the Fed to hold interest rates in the near future.
Finally, the U.S.-China trade tensions are likely to continue to grab attention, with China exempting some U.S. goods from the 125% tariffs, aiming to ease the economic impact of the growing trade dispute with the U.S., as Chinese authorities have reportedly asked local firms to list imports that could be eligible for exemptions.
U.S. President Donald Trump responded quickly to these developments, stating that talks with China “have not stopped” and that communication between the two sides is ongoing. However, China’s foreign ministry said the presidents of China the United States “didn’t have a call recently,” denying any communication between the two countries.