• A combination of diverging factors failed to provide any meaningful impetus to gold on Thursday.
  • Resurgent USD demand exerted some intraday pressure, COVID-19 jitters helped any the downside.
  • A goodish rebound in the US bond yields prompted some selling during the Asian session on Friday.

Gold seesawed between tepid gains/minor losses on Thursday and finally settled with modest gains for the third straight session. Following an early uptick to the highest level since June 16, the XAU/USD witnessed some intraday selling and fell to the $1,820 area amid a strong pickup in the US dollar demand. Despite Fed Chair Jerome Powell's dovish testimony, investors seem convinced that the US central bank will tighten its policy sooner than anticipated amid rising inflationary pressures. This, in turn, was seen as a key factor that acted as a tailwind for the greenback and undermined dollar-denominated commodities, including gold.

Meanwhile, the USD bulls largely shrugged off mixed US economic releases. The Initial Weekly Jobless Claims matched expectations and dropped to 360K during the week ending July 10 from the previous week's upwardly revised reading of 386K. Adding to this, the NY Fed's Empire State Manufacturing improved sharply to 43 in June. This was offset by weaker than anticipated Philly Fed Manufacturing Index, which fell to 21.9 for the current month. Separately, Industrial Production recorded a modest growth of 0.4% as against the 0.7% increase anticipated. The data did little to influence the USD or provide any meaningful impetus to the precious metal.

That said, concerns about the ongoing COVID-19 outbreaks involving the Delta variant helped limit losses for the safe-haven commodity. The global flight to safety was reinforced by an extension of the steep decline in the US Treasury bond yields. This was seen as another factor that extended some support to the non-yielding yellow metal. The intraday uptick, however, lacked any strong follow-through buying and bulls, so far, have struggled to capitalize on the move beyond the very important 200-day SMA. A goodish rebound in the US bond yields on Friday kept a lid on any further gains, rather prompted some selling during the Asian session.

Market participants now look forward to the release of the US monthly Retail Sales figures, due later during the early North American session. Apart from this, the US bond yields, will influence the USD price dynamics and provide some impetus to the XAU/USD. Traders will further take cues from the broader market risk sentiment and developments surrounding the coronavirus saga for some meaningful opportunities on the last day of the week.

Short-term technical outlook

From a technical perspective, Wednesday’s strong move up confirmed a near-term bullish breakout through a one-week-old trading range. A subsequent move beyond the 200-day SMA might have already set the stage for additional gains. Hence, some follow-through strength towards the $1,845-46 region, en-route the next major hurdle near the $$1,866 area, now looks a distinct possibility. The momentum could further get extended towards the $1,880 level before bulls eventually aim to reclaim the $1,900 round-figure mark.

On the flip side, the overnight swing lows, around the $1,820 region, nearing the trading range resistance breakpoint, now seems to protect the immediate downside. Any further pullback might be seen as a buying opportunity near the $1,808-07 zone. This is followed by the $1,800 mark, which if broken decisively will negate any near-term positive bias and prompt some aggressive technical selling around the XAU/USD.

fxsoriginal

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD deflates to three-day lows around 1.1130

EUR/USD deflates to three-day lows around 1.1130

The euro remains under heavy pressure on Friday, with EUR/USD retreating toward the 1.1130 level to hit new three-day troughs. Despite a weaker reading in the U-Mich index in May, the US Dollar found support as inflation expectations ticked higher.

GBP/USD slips back to 1.3250 on USD-buying

GBP/USD slips back to 1.3250 on USD-buying

GBP/USD recedes to the mid-1.3200s on Friday session, as the Greenback regains ground against the broadeer risk-linked universe. Supporting the upside in the US Dollar comes a rise in US consumer inflation expectations, according to the latest data from the U-Mich survey.

Gold looks depressed below $3,200

Gold looks depressed below $3,200

Gold reversed course on Friday, falling sharply below the $3,200 mark after Thursday’s strong rally. The retreat came as a resurgent US Dollar and easing geopolitical tensions weighed on demand for the safe-haven metal. Furthermore, XAU/USD remained under pressure and is on track to log its biggest weekly loss of the year.

Is Ethereum's comeback real?

Is Ethereum's comeback real?

Ethereum price hovers above $2,500 on Friday after soaring nearly 100% since early April's bottom. The ETH Pectra upgrade has boosted over 11,000 EIP-7702 authorizations in a week, indicating healthy uptake by wallets and dApps.

Trump’s Middle East dealmaking blitz: What does it mean for investors?

Trump’s Middle East dealmaking blitz: What does it mean for investors?

President Donald Trump’s May 2025 Middle East visit has unleashed a flurry of mega-deals, aimed at deepening U.S. trade ties, correcting trade imbalances, and reinforcing America’s leadership in defense and technology exports.

The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Majors

Cryptocurrencies

Signatures

Best Brokers of 2025