- Gold price is making efforts for keeping auction confidently above $1,980.00 amid the delicate USD Index.
- Market sentiment is quite positive after the clearance of the US debt-ceiling bill in Congress.
- The only catalyst that can save the USD index from a further casualty is the US NFP data.
Gold price (XAU/USD) is looking to fit its auction above $1,980.00 in the early European session. The precious metal has been fueled with fresh blood as the USD Index is expected to remain in the bearish trajectory amid the absence of recovery signals.
S&P500 futures have posted decent gains in Asia as the market sentiment is quite positive after the clearance of the US debt-ceiling bill in Congress and a decline in expectations of one more interest rate hike from the Federal Reserve (Fed).
The US Dollar Index has refreshed its weekly low at 103.45 as Fed policymakers are favoring a pause in June’s monetary policy meeting considering the fact that US domestic factory activities are consistently contracting.
The only catalyst that can save the USD index from a further casualty is the United States Nonfarm Payrolls (NFP) data. Economists at Commerzbank expect if the US labor market report for May is strong and above expectations, the Dollar could rise. Further, they added that given the fairly stable downward trend in employment growth, they expect 200K new jobs to have been created in May after 253K in April. This would probably keep the unemployment rate at 3.4%. The noticeable weakening of the labor market desired by the US Federal Reserve, which could dampen inflation, would thus not yet be achieved.
Gold technical analysis
Gold price has delivered a breakout of the downward-sloping trendline plotted from an all-time high at $2,079.76 on a two-hour scale. The precious metal is gathering strength for breaking above the horizontal resistance plotted from May 19 high at $1,984.25.
Gold price has climbed above the 200-period Exponential Moving Average (EMA) at $1,973.58, which conveys that the long-term trend has turned bullish.
The Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that the upside momentum is active now.
Gold two-hour chart
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