Gold slides ahead of crucial US economic reports

Gold slid down more than $20 an ounce to $1322 yesterday ahead of some crucial economics reports which are due today and tomorrow, the yellow metal is expected to extend slide up to $1300 or even below before resuming further upside movement.

As of this writing, the precious metal is being traded near $1328. Immediate hurdle can be noted around $1337-$1345 resistance area, a break and daily close above $1345 shall expose $1373 which is 76.4% fib level. A reversal from $1373 will print a Higher High (HH) on daily chart i.e. a signal for long term bullish trend.

On downside, support can be seen near $1307, 50% fib level, ahead of $1295 which is 200 Daily Moving Average (DMA). A break and daily close below 200 DMA shall threaten $1250 and then $1220.

Today the US commerce department is due to release durable goods orders report. The report highlights the number of durable goods orders received by the manufacturer. A high reading is seen as bullish for US Dollar (USD) and vice versa. According to median projection of different analysts, durable goods orders declined by 1.5% in January compared to 4.2% decline in a month before. Moreover, the US labor department is also scheduled to release initial jobless claims report today. According to the forecast, number of people –who claimed unemployment benefits—ticked down last week to 335,000 from 336,000 in a week before. A better than expected reading will be bearish for Gold and vice versa.

In addition, Fed chairperson Janet Yellen is also due to speak today. Her remarks about future monetary policy outlook might stir volatility in the price of gold. Then tomorrow, US bureau of economic analysis will release US growth data for the fourth quarter. The fate of gold is linked to these high profile events.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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