Gold Price Analysis: XAU/USD steadies above $1,770 ahead of key US data
- Gold struggles to stage a decisive rebound following Wednesday's drop.
- Wall Street's main indexes look to open in positive territory.
- Upbeat market mood makes it difficult for USD to find demand.
The XAU/USD pair climbed to its highest level since October of 2012 at $1,789 on Wednesday but ended up closing the day deep in the negative territory at $1,770. With the trading action turning subdued ahead of key macroeconomic data releases from the US, the pair is posting small gains at $1,773.
Upbeat macroeconomic data releases from the US on Wednesday revived hopes of a strong global economic recovery in the second half of the year despite the continually-increasing number of COVID-19 cases. Reflecting the risk-on environment, major European equity indexes are up between 0.8% and 1.8% on the day and the S&P 500 futures are gaining 0.78%, pointing out to a positive opening in Wall Street.
Focus shifts to US jobs report
However, investors are likely to remain on the sidelines until the US Department of Labor Statistics published the labour market report. Experts expect the Nonfarm Payrolls (NFP) in June to increase by 3 million. A better-than-expecting NFP figure could provide an additional boost to sentiment and further weigh on safe-haven gold.
Previewing the data, “employment gains should have been sizeable in the month judging from a decline in continuing claims between the May and the June reference periods, said economists at the National Bank of Canada. "Unfortunately, these gains are likely to have been at least partially offset by yet more job losses; initial jobless claims continued to pile at a steady clip over that period."
US NFP Preview: Eight major banks expectations for June jobs report.
Nevertheless, the greenback is also struggling to find demand and another wave of USD-selling could help XAU/USD limits its losses. At the moment, the US Dollar Index is down 0.23% on the day at 96.93.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
