- Spot gold is going sideways in the $1790 area ahead of a busy week for US data and central banks.
- XAU/USD looks vulnerable from a technical perspective after it fell under key levels of support last week.
- If strong/inflationary US data this week further boosts Fed tightening speculation, gold could be headed towards $1750.
Spot gold (XAU/USD) prices are going sideways in the $1790 area amid a quiet start to a busy week of central bank policy decisions and important economic data releases. The subdued tone to trade is not surprising given the lack of price action in FX and bond markets, where the DXY is consolidating close to recent highs above 97.00, as are bond yields, with the US 10-year just under 1.80%.
As attention turns to the US January ISM PMI surveys scheduled for release on Tuesday and Thursday ahead of the release of the official January labour market report on Friday, XAU/USD is looking vulnerable from a technical perspective.
Gold clatters below key support
Gold’s swift sell-off in the latter three days of last week that saw it drop more than 3.0% from around the $1850 level has seen the precious metal clear a number of key areas of support to the downside.
First, spot gold broke below an upwards trend channel that had been in plan since mid-December and secondly, spot prices broke below the 21, 50 and 200DMAs between the $1800-$1820 levels. For now, annual lows in the $1780s are offering support, but a break below here would open the door to a test of the December lows near $1750.
Hawkish Fed vibes weigh on gold
Federal Reserve Bank of Atlanta Raphael Bostic, whilst sticking to his expectation that the Fed would hike rates three times this year, hinted over the weekend that significantly more rate hikes could be in order should the data require it. He also openly hinted at the possibility that the Fed could depart from its usual policy of implementing 25bps moves by hiking interest rates by 50bps if required.
His remarks come on the back of last week’s hawkish Fed policy announcement that triggered speculation of as many as seven rates hikes in 2022 from some US banks, speculation which at the time hit gold hard (and benefitted the US dollar and US yields).
Upcoming jobs report key
On a week where strong US data could spur further hawkish speculation, gold also looks vulnerable from a fundamental perspective. Friday’s jobs report will be the most important metric to keep an eye on, with measures of labour market slack (unemployment and participation rate) and wage inflation (average hourly earnings growth) more important than the headline NFP number.
That is expected to be weak due to the spread of Omicron dissuading workers from returning to the workforce. Some analysts are calling for gold to head lower to $1600 if the wage and inflation data in the coming weeks (ahead of the March Fed meeting) suggests more persistent inflationary pressures than expected by the Fed.
|Today last price||1791.93|
|Today Daily Change||3.07|
|Today Daily Change %||0.17|
|Today daily open||1788.86|
|Previous Daily High||1799.46|
|Previous Daily Low||1780.32|
|Previous Weekly High||1853.91|
|Previous Weekly Low||1780.32|
|Previous Monthly High||1830.39|
|Previous Monthly Low||1753.01|
|Daily Fibonacci 38.2%||1787.63|
|Daily Fibonacci 61.8%||1792.15|
|Daily Pivot Point S1||1779.63|
|Daily Pivot Point S2||1770.41|
|Daily Pivot Point S3||1760.49|
|Daily Pivot Point R1||1798.77|
|Daily Pivot Point R2||1808.69|
|Daily Pivot Point R3||1817.91|
Follow us on Telegram
Stay updated of all the news
EUR/USD drops toward 1.0700 after US jobs report
EUR/USD came under renewed bearish pressure in the second half of the day on Friday and declined toward 1.0700. Stronger-than-expected Nonfarm Payrolls (NFP) data helps the US Dollar gather strength ahead of the weekend and forces the pair to stay on the back foot.
GBP/USD extends slide below 1.2450 amid a stronger USD
GBP/USD dropped further and hit fresh daily lows below 1.2450 amid a stronger US dollar. The Greenback remains firm following the release of the US May jobs report. Despite losing almost 100 pips on Friday, GBP/USD is still on track for a weekly gain.
Gold falls below $1,960 as US yields rebound after US jobs data
Gold price turned south and declined below $1,960 on Friday. After the data from the US revealed that Nonfarm Payrolls rose 339,000 in May, the benchmark 10-year US Treasury bond yield gained more than 2% and recovered toward 3.7%, weighing heavily on XAU/USD.
China crypto community picks Ethereum, Arbitrum and BNB Chain as top protocols
Ethereum, Arbitrum and BNB Chain protocols are top picks for the Chinese crypto community, data from a report shows, a possible bullish catalyst for tokens related to these protocols as Hong Kong opens the door of crypto to retail investors.
LULU stock adds 15% on big Wall Street beat
Lululemon Athletica did it again. In something that has become quite predictable, LULU stock sailed 14.9% higher in Friday’s premarket to $377.20 after the prized athleisure brand posted a nearly 15% earnings beat for the first quarter.