• Gold Price clings to 21-DMA after staging a comeback from ten-day lows.
  • The USD holds the higher ground heading into key US jobs data.
  • XAUUSD to extend range play around $1,850 while bulls stay cautious.

Gold Price enjoyed good two-way businesses, having tumbled to ten-day lows of $1,829 in the first half of Wednesday’s trading. The ongoing advance in the US dollar and the yields, amid persistent risk-off flows, weighed down on the bright metal. Later in the day, XAUUSD rebounded swiftly after seeing dip-buying interest, as inflation worries engulfed markets on surging oil prices, reviving the appeal of gold as a hedge against inflation. An upside surprise in the US ISM Manufacturing PMI, arriving at 56.1 in May vs. 54.5 expected, rekindled the US economic optimism and brought the aggressive Fed tightening expectations back on the table, which added to the risk-off mode and fuelled a sell-off in Wall Street indices. The US stocks retreat offered a floor to the price of gold.

Heading into the US AFP Employment Change data release this Thursday, gold price is lacking the follow-through recovery momentum. A bull-bear tug-of-war is well in play, as the dollar holds onto its recent advance while Treasury yields stage a minor pullback. The benchmark US 10-year yields are retreating after facing rejection just shy of the 3% level, which could bode well for the non-yielding metal. Bulls, however, remain cautious amid resurfacing aggressive Fed rate hikes bets and ahead of the US ADP jobs data, which seen rising to 300K in May vs. 247K previous.

Meanwhile, investors will also assess the latest hawkish Fed commentary and the upbeat outlook on the economy, as shown by the central bank’s Beige Book released late Wednesday. Strong US employment numbers will add to the hawkish Fed rate hike track, which could likely bolster the dollar’s demand at gold’s expense.

Gold Price Chart: Daily chart

Gold Price rebounded firmly and recaptured the 200-Daily Moving Average (DMA) at $1,841 on a daily closing basis.

The yellow metal has opened Thursday above the bearish 21-DMA at $1,845, which is now acting as strong support.

Bulls could take out the $1,850 hurdle should the recovery momentum extend in the sessions ahead.

The next key resistance level is seen at $1,859, which is the descending trendline hurdle. A firm break above the latter will call for a retest of the previous week’s high of $1,870.

The 14-day Relative Strength Index (RSI) is sitting just beneath the midline, suggesting that recovery attempts are likely to remain shallow and sellers could jump in on the bounce.    

A breach of the 21-DMA once again will expose the 200-DMA support, below which the previous day’s low of $1,829 will be put to test.

The next downside target aligns at the $1,820 round figure before the May 19 low of $1,811 could be threatened.  

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.

Feed news Join Telegram

Recommended Content

Recommended Content

Editors’ Picks

EUR/USD turns south towards 1.0150 ahead of EU GDP, Fed minutes

EUR/USD turns south towards 1.0150 ahead of EU GDP, Fed minutes

EUR/USD has come under renewed selling pressure below 1.0200 amid broad risk-aversion. The US dollar rebounds ahead of Fed minutes while the euro awaits Eurozone GDP. The shared currency remains weighed down by recession fears and gas crises.


GBP/USD drops below 1.2100 amid risk-aversion

GBP/USD drops below 1.2100 amid risk-aversion

GBP/USD is falling below 1.2100 in the European session on Wednesday as investors assess the implications of surging UK inflation on the BOE's next policy move. The US dollar finds demand amid souring risk sentiment ahead of US data and Fed minutes. 


Gold’s battle with 50 DMA extends ahead of Fed minutes

Gold’s battle with 50 DMA extends ahead of Fed minutes

Gold price rebounds from weekly lows as the USD resumes correction. US Treasury yields are struggling to find demand ahead of the Fed minutes. XAU/USD needs acceptance above 50 DMA to sustain the recovery.  

Gold News

Solana price hints at a 50% upswing under these specific conditions

Solana price hints at a 50% upswing under these specific conditions

Solana price shows an interesting setup as it tries to overcome a stiff resistance level. The fifth attempt to overcome hurdles will likely be successful due to multiple bullish confluences. Solana price has been on a clear uptrend since producing the June 14 swing low at $25.76.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!