XAU/USD Current price: $1,966.67
- US Dollar swings alongside speculation about the next Federal Reserve decision.
- Hawkish surprises from the RBA and the BoC continue to drive sentiment.
- XAU/USD could gather additional upward strength once above the $1,970 region.
XAU/USD posted a nice comeback after bottoming at $1,939.66 a troy ounce on Thursday, a fresh weekly low. The US Dollar traded with a soft tone since the beginning of the day but turned frankly negative within American trading hours. A worse-than-expected employment-related report was the initial catalyst, as Initial Jobless Claims unexpectedly surged to 261K in the week ended June 2.
The USD accelerated its decline with Wall Street’s opening, despite the fact that the three major indexes managed to post modest gains, which they retain at the time of writing. The dismal United States figures pushed investors into lifting bets on a dovish Federal Reserve (Fed). Odds for a rate hike next week are back above 70% after declining sharply on Wednesday on the back of a hawkish surprise from the Bank of Canada (BoC). The BoC and the Reserve Bank of Australia (RBA) shocked financial markets with unexpected hikes, raising doubts about the end of the tightening cycle in the US.
The US Dollar is also being affected by the sharp retracement of government bond yields. After being on the winning side for most of the week, Treasury yields are now in retreat mode, with the 10-year note offering 3.72% and the 2-year one 4.5%.
Coming up next, China will publish May inflation figures in the Asian session, which may take their toll on the market’s sentiment. Later in the day, Canada will publish May employment figures, with no other relevant data in Friday’s docket.
XAU/USD price short-term technical outlook
XAU/USD trades around the 23.6% Fibonacci retracement of its latest daily slump at $1,966.20. The daily chart shows that buyers continue to defend the downside around a flat 100 Simple Moving Average (SMA) at around $1,941, while a bearish 20 SMA converges with the mentioned static level and caps advances. At the same time, the Momentum indicator remains directionless, just below its midline, while the Relative Strength Index (RSI) aims higher but below its 50 line, still suggesting cautious buying interest.
In the near term, and according to the 4-hour chart, the chances skew to the upside, although the pair has partially lost its upward strength. Technical indicators have turned flat after crossing their midlines into positive territory as XAU/USD consolidates near its daily high. Furthermore, Gold seems comfortable after recovering above its 20 and 100 SMAs, which slowly grind higher. The pair has met sellers around the $1,970 threshold these days, the immediate resistance level to overcome to extend its advance towards the next Fibonacci resistance, the 38.2% retracement at $1,987.65.
Support levels: 1,954.50 1,942.50 1,932.00
Resistance levels: 1,972.00 1,987.65 2,003.10
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
Editors’ Picks
USD/JPY holds positive ground around 151.50 following Japanese CPI data
The USD/JPY pair holds positive ground for the second consecutive day near 151.45 on Friday during the early Asian trading hours. The cautious approach from the Bank of Japan to keep monetary conditions accommodative exerts some selling pressure on the Japanese Yen.
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Top 3 Price Prediction BTC, ETH, XRP: Retail watches from the sidelines with a bias for shorts
Bitcoin is showing strength as markets head into the Easter holidays. As it rises, altcoins are following suit, with Ethereum and Ripple posting almost similar gains. Meanwhile, there remains an unfilled CME Gap, with a lot of liquidity also resting above and below BTC price.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.