- The price of Oriver falls despite the good data of the week; US job growth exceeds expectations.
- Rising US Treasury yields and a stronger dollar put pressure on gold lower.
- US debt ceiling resolution lowers bond yields, possible respite for gold.
The price of Gold falls after hitting a daily high of $1,977.87 as the release of a strong US jobs report propped up US Treasury yields, a headwind for the yellow metal . This, coupled with the strength of the US dollar (USD), keeps XAU/USD under pressure to the downside, but still poised to end the week with decent gains. At the time of writing these lines, the XAU/USD It is trading below the $1,950 area.
XAU/USD falters amid strong US data, rebound in Treasury yields and rising Fed rate hike expectations.
Risk appetite keeps safe haven assets under pressure as Wall Street shrugged off a strong US jobs report. On Friday, the US Department of Labor released the Nonfarm Payrolls report for May, which beat estimates of 190,000 as the economy added 339,000 jobs. The Unemployment Rate grew 3.7% year-on-year from 3.4%.
US Treasury yields reacted higher, with 2s jumping 16 basis points to 4,501%, while 10-year yields stood at 3,689%, gaining nine basis points. The Dollar rose 0.43%, as the Dollar Index shows, which stood at 104.026, on the brink of posting its first weekly loss, snapping three weeks of gains.
Bets have increased that the US Federal Reserve will keep rates unchanged at the June meeting, although in July the US central bank will almost certainly raise rates by 25bp.
It must be said that once the US House of Representatives and Senate passed the US debt ceiling bill, bond yields went down. The bill would be signed by US President Joe Biden over the weekend, ending the soap opera.
XAU/USD Price Analysis: Technical Perspective
The XAU/USD pair is biased neutral to the downside despite spot gold continuing to trade above the 200 day EMA at $1,886.98. As the yellow metal posted a successive series of lower highs, despite waiting for confirmation for a second lower low, the bias shifted slightly to the downside.
Oscillators such as the Relative Strength Index (RSI) and the 3-Day Rate of Change (RoC) suggest that the sellers are in command, although a decisive break below $1,950 would put them in the driver’s seat to challenge the $1,950 EMA. 200 days.
The first support for XAU/USD would be $1,950, followed by the 100-day EMA at $1,936.30. Once passed, the $1,900 level would be next. On the other hand, the first resistance for the XAU/USD would be the 50-day EMA at $1,970.78, closely followed by the 20-day EMA at $1,972.86. Upside risks are at $2,000.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
