Chart of the day - GOLD (07.05.2021)

After three weeks of struggle, gold has managed to deliver a strong upward move yesterday and jump above the $1,800 mark. Upward move is being continued today and the precious metal tests the $1,820 handle – the highest level since February 16, 2021. US dollar weakness and recent drop in US yields are main drivers behind the break above $1,800. Today’s key event – US NFP report for April at 1:30 pm BST – is likely to trigger a jump in volatility on USD and gold market.

Taking a look at GOLD from a technical point of view, we can see that the price of the precious metal is approaching the upper limit of the downward channel. This is a key short-term hurdle for gold bulls. The two next resistance levels to watch should the upward move continue can be found at $1,850 and $1,875. The former is marked with the 200-session moving average (purple line) while the latter is marked with the upper limit of the Overbalance structure.