- Gold erases the bounce from the second half of last week and remains under pressure.
- XAU/USD retesting the 100 day moving average.
- Rise in Treasury bond yields hits gold.
- A key week begins, with the focus on the Fed meeting.
The Prayed is falling sharply at the beginning of the week and loses more than $20, being one of the assets that moves the most. The value of the zone reached as high as $1,900 in the Asian session and it recently hit a daily low at $1876.75.
The XAU/USD remains in the low zone, under negative pressure, after a strong reversal of more than $40 from Friday’s high. It is targeting the April lows hit last week at $1871, which will be exposed if there is a consolidation below $1880. The next support is seen at $1870. To alleviate negative pressures XAU/USD needs to come back and hold above $1900.
The economic calendar for Monday shows ahead the final reading for April of the S&P Global Manufacturing PMI and the ISM manufacturing, in addition to the construction spending report for March. They will be important numbers. The focus of the week is on the Federal Reserve meeting that begins on Tuesday and will announce decisions on Wednesday.
What the Fed decides will be key for gold due to the impact on US bonds. Treasury yields on Monday are validating Friday’s advance, helping to cap gold. The 10-year rate yields 2.93% and the 30-year rate is around 3%. The dollar does not register significant variations on Monday and the DXY rises 0.15%.
Wall Street futures point to a higher open after Friday’s crash. The continuation of a cautious climate coupled with higher yields and a firm dollar is a negative combination for gold, which persists at the start of the week.
Technical levels
Source: Fx Street
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