Gold prices continued to rally on Monday after rising by 3.5% last week. The dollar declined and yields continued to ease. There are now several groups including the U.S. Chamber of Commerce that are blaming the poor performance of the Jobs data on the extended unemployment benefits which make it more attractive to collect unemployment than going back to work.
Trade gold with FXTM
Gold prices moved higher on Monday, continuing to break out above trend line resistance. Support is now seen near former resistance, a downward sloping trend line near 1,799. Target resistance is seen near the Fibonacci retracement level of 50.0%, which is seen near 1,876. Additional support is seen near the 10-day moving average at 1,794 and then the 50-day moving average at 1,746. The 10-day moving average has crossed above the 50-day moving average, meaning that a short-term uptrend is now in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).
Chamber of Commerce Calls for Benefits Reduction
The U.S. Chamber of Commerce blamed a $300-per-week federal jobless benefit for enticing Americans to stay at home, which generated headwinds for the April jobs report. Based on the Chamber’s analysis, the $300 benefit results in approximately one in four recipients taking home more in unemployment than they earned working. The group’s attack against the federal unemployment benefit came hours after the Labor Department reported that total nonfarm payroll employment rose by 266,000 last month, far below the 1 million expected.