Gold is mainly trading bullish on Thursday, driven by a weak dollar and low initial jobless claims data.
The price of Gold advanced in the Thursday trading session $11.77 or 0.73%, climbing to $ 1,629.12 per ounce, pushed up by the U.S. Dollar Index (DXY) weakness that stumbles 1%, and currently trade at 99.93 pts.
On the other hand, this Thursday, the weekly initial jobless claims data raised to 3,283k requests, surpassing the analysts' consensus, which expected an increase of 1,650k applications.
This level of initial claims alerts of the economic impact that the virus is starting to produce not only on the U.S. economy but in the global economy too.
Likewise, this situation can be extrapolated to the non-farm payroll data that will be released by the U.S. Department of Labor on next Friday, April 03rd.
From an Elliott Wave perspective, Gold, in its hourly chart, shows the development of a corrective formation that could correspond to a flat pattern.
According to Elliott wave theory, a flat pattern is one of the three models of corrective formations and characterizes by following an internal sequence subdivided into 3-3-5.
In the previous figure, we can observe that the precious metal is moving in a wave ((b)) of Minute degree identified in black, which started its bullish sequence when the price touched its bottom of $ 1,451.43 per ounce, on March 16th, 2020.
Once the price action found the short-term bottom, the yellow metal began to advance in a three-wave sequence of Minuette degree labeled in blue.
Currently, the precious metal raises in the fifth wave of Subminuette degree identified in green. At the same time, the current bullish leg in progress belongs to wave (c) of Minuette degree labeled in blue.
Once this bullish movement is complete, the wave ((b)) of Minute degree in black degree will be finished, and, according to Elliott wave theory, a third segment of the corrective wave corresponding to wave ((c)) will begin.
This new bearish leg will have an internal structure subdivided into five segments and could fall below the psychological support of $1,500 per ounce.
In conclusion, the yellow metal is in an exhaustion phase corresponding to wave ((b)) still in progress. Accordingly, our primary bias for Gold is neutral; however, considering that the next path corresponds to wave ((c)), we expect a technical indication of reversal of the short-term trend from bullish to bearish.
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