- Gold price attempts a bounce from three-week lows of $1,933 early Thursday.
- Strong US jobs data outweighed fiscal concerns, drove US Dollar, Treasury bond yields higher.
- Gold price awaits Bank of England verdict and US ISM Services PMI for further downside.
Gold price is seeing a dead cat bounce from three-week troughs of $1,933 set on Wednesday, as the United States Dollar (USD) rally takes a breather. Gold traders await the Bank of England (BoE) policy announcements and the US ISM Services PMI data for fresh trading impetus.
Will Bank of England and US ISM Services PMI rescue Gold price?
Gold price is licking it wounds following a two-day downtrend, as the US Dollar has paused its recent upbeat momentum, despite a cautious market mood. Investors turn cautious amidst the revival of the hawkish Federal Reserve (Fed) expectations and fiscal worries in the United States, as they brace for the BoE interest rate decision and key US ISM data and tech earnings report.
An unexpected improvement in the Chinese Caixin Services PMI also aids the Gold price, as China is the world’s biggest Gold consumer. China's Services Purchasing Managers' Index (PMI) rose to 54.1 in July, compared with a 53.9 expansion seen in June. The gauge was expected to drop to 52.5 in the reported month.
Later in the day, if the Bank of England (BoE) delivers a 25 basis points (bps) rate hike, with a hawkish message, the non-interest-bearing Gold price is likely to come under renewed selling pressure, refreshing multi-week lows. Further, the upbeat US ISM Services PMI could add to recent signs of economic resilience, providing a fresh boost to the US Dollar at the expense of the Gold price.
On Wednesday, the US Dollar rallied to fresh monthly highs against its six major rival currencies after the benchmark 10-year US Treasury bond yields reached a nine-month peak on another stunning US ADP jobs report. US private sector employment gains in July totaled 324,000, compared with the expected 189,000 job additions in the reported month.
Strong US JOTLS job openings and ADP Employment Change data indicate that the country’s labor market conditions remain tight, backing the case for further rate hikes by the Federal Reserve. The US economic resilience overweighed concerns over the country’s debt rating downgrade by Fitch.
Gold price technical analysis: Daily chart
Having confirmed a symmetrical triangle breakdown on the daily sticks on Tuesday, Gold price extended its bearish momentum into the second straight trading day.
In doing so, Gold price sought a daily close below the critical horizontal 50-Daily Moving Averages (DMA) at $1,945, keeping the downside exposed amid a beairsh 14-day Relative Strength Index (RSI) indicator.
Gold buyers seem to have found a temporary support at the July 12 low of $1,932, at the moment. But Gold sellers are likely to regain poise, sending rates back toward the static support seen around $1,925.
The additional decline will challenge the early July lows around the $1,910 region.
Alternatively, Gold buyers will find immediate upside barrier at the 50 DMA of $1,945, above which strong resistance near $1,952 will come into play. That supply zone is the confluence of the triangle support and the mildly bullish 21 DMA.
Acceptance above the latter could trigger a meaningful recovery toward the flattish 100 DMA at $1,969.
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
GBP/USD rises to near 1.2540, driven by higher UK GDP
GBP/USD edged higher to near 1.2540 during Asian hours on Friday, buoyed by the release of higher-than-expected UK Gross Domestic Product (GDP) data for the first quarter.
EUR/USD: The crucial resistance level will emerge at the 1.0790–1.0800 region
The EUR/USD pair trades on a softer note near 1.0775 during the early European hours on Friday. The downtick of the major pair is supported by the renewed US Dollar demand amid hawkish comments from Federal Reserve officials.
Gold price attracts some buyers despite hawkish Fedspeak
Gold price edges higher for the second consecutive day on Friday. Weak employment data bolstered the speculation that the weakening economy would force the Fed to cut rates.
Ethereum waiting on a bullish trigger, Consensys CEO takes a jab at the SEC
Ethereum co-founder alleges that the SEC aims to stifle innovation through its enforcement actions against Ethereum-related companies. Grayscale CEO says he's optimistic the SEC would approve its spot ETH ETF application.
Rate cut optimism fuelled by higher US jobless claims
With Federal Reserve policy acting as the primary driver of investor sentiment in 2024, renewed optimism surrounding the possibility of rate cuts has propelled the Dow to its most significant rally since December.