- Gold price is struggling to convince buyers within a bearish chart pattern.
- The DXY Dollar Index tracks two-year Treasury yields and pulls back from multi-day highs.
- US tax hike fears, fading Chinese recovery hopes and hawkish Fed expectations challenge XAU/USD bulls.
- Initial signs for Friday’s NFP jobs report look promising ahead of the second tier data.
The price of gold (XAU/USD) remains undecided around $1,813 at the start of the European session on Thursday, as traders look for more clues to defend the corrective bounce from one-week lows. Lack of data and major events, as well as caution ahead of the release of the US jobs report for February, due out on Friday, also limit immediate moves for the yellow metal.
gold prices rebounded from a one-week low on Wednesday as investors celebrated a small pullback in the dollar amid 2-year Treasury yields retrace from the highest levels since 2007. That said, the DXY US Dollar Index breaks a two-day uptrend, as it pulls back from the highest levels since 1 December 2022, now falling 0.13% intraday near 105.55, while 2-year US Treasury yields are down 0.50% on the day to 5.05%.
It should be noted that hawkish comments by Fed Chairman Jerome Powell showing willingness to further rate hikes if necessaryjoin upbeat data hinting at Friday’s NFP jobs report, which may challenge the latest XAU/USD bounce.
The disappointment of China’s inflation data for February could be along the same lines. Besides, fears of a tax hike in the world’s largest economy, USA, as well as the political chaos associated with it, also challenge gold buyers. The President of the USA, Joe Biden proposes raising corporate tax from 21% to 28% in his latest budget guide before publication on Friday.
In terms of sentiment, S&P 500 futures are struggling to find a clear direction after rebounding from a one-week low hit the day before. Additionally, 10-year US Treasury yields are up as high as 3.99%, one basis point (bp) on the day.
Looking ahead, US initial jobless claims for the week ending March 3 will join February Challenger job cuts data to provide more detail ahead of the first-ever jobs data. Friday’s level, mainly non-farm payrolls (NFP).
Gold Price Technical Analysis
The price of gold shows a “bearish flag” on the 1 hour chart, which suggests that the precious metal will continue to fall if confirmed. XAU/USD downtrend looks reinforced by the appearance of bearish crosses on the MACD and the latest retracement of the RSI (14), without forgetting the sustained trade below the 200 hour moving average.
It is worth noting, however, that the XAU/USD needs a clear break of the lower flag line around $1,812 at the time of writing, to convince XAU/USD sellers to target the theoretical target of $1,772.
During the fall, the level of $1,800 and the mid-December 2022 low near $1,775 They can act as intermediate supports.
On the other hand, the upper line of the aforementioned flag, close to $1,823 at the time of writing, it caps the immediate rise in the gold price ahead of the 200 hourly SMA on $1,830. Also acting as a bullish obstacle is a bearish resistance line from Monday, near $1,840.
Overall, the gold price is likely to remain weak, but new selling awaits a clear break of $1,812 first.
Gold 1 hour chart
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Trend: More falls are expected
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.
