- Gold price grinds higher after a volatile week that refreshed all-time high before easing on Friday.
- United States Nonfarm Payrolls, hawkish Federal Reserve talks prod XAU/USD bulls.
- Fed’s dovish hike, downbeat US Dollar and China demand keep Gold buyers hopeful.
- Survey report on US banks, inflation data eyed for further guide.
Gold price (XAU/SD) seesaws around $2,016 during a dull Monday, after posting the first daily loss in four and two-week uptrend.
The precious metal’s latest corrective bounce can be linked to the market’s inaction amid holidays in the UK and mixed risk catalysts. It’s worth noting that the Gold sellers remain off the table amid broad US Dollar weakness and dovish concerns surrounding the Federal Reserve (Fed), as well as a cautious mood ahead of this week’s United States inflation and bank report.
Gold price eases on upbeat United States data, hawkish Fed talks
Gold price witnessed a pullback on Friday as upbeat United States employment data renewed hawkish Federal Reserve (Fed) concerns.
That said, the US employment report for April surprised markets by unveiling a jump in the headline Nonfarm Payrolls (NFP) by 253K expected and revised down prior readings of 165K. Further, the Unemployment Rate also eased to 3.4% versus 3.5% market forecasts and previous mark whereas Average Hourly Earnings improved to 4.4% YoY from 4.3% prior (revised) and analysts’ estimations of 4.2%.
Following the upbeat US employment report, St. Louis Federal Reserve President James Bullard, who supported the 25 basis point rate hike that the Fed took last week, called it "a good next step." The policymaker cited significant amount of inflation in the economy and "very tight" labor market to back his hawkish bias. His comments renew hopes of a one more 0.25% Fed rate hike in June, which in turn prod Gold buyers after the commodity refreshed all-time high.
Federal Reserve’s dovish hike, softer US Dollar defend XAU/USD bulls
Despite the recent hopes favoring the Gold price pullback ahead of the key data/events, the dovish Federal Reserve (Fed) interest rate hike and hopes of more problems for the US Dollar keep the XAU/USD buyers hopeful. That said, the US Treasury Secretary Janet Yellen on Sunday issued a stark warning that a failure by Congress to act on the debt ceiling could trigger a "constitutional crisis" that also would call into question the federal government's creditworthiness, per Reuters. On the same line, a leading European rating agency, Scope Ratings, placed the United States of America's AA long-term issuer and senior unsecured debt ratings in local and foreign currency under review for a possible downgrade due to longer-run risks associated with the misuse of the debt ceiling instrument, per Reuters.
Additionally, news that China’s central bank added to its Gold reserve for the sixth consecutive month in April to 66.76 million ounces (1,893 tons) also underpins the bullish bias about the XAU/USD.
Banking updates, US inflation signals eyed for clear Gold price directions
Although the Gold price grinds higher after refreshing the record top, a cautious mood ahead of the key United States data and events prod the XAU/USD bulls. Among them, the US Senior Loan Officer Opinion Survey on Bank Lending Practices and the US Consumer Price Index (CPI) for April, up for publishing on Tuesday and Wednesday, will be crucial to watch for clear directions.
Also read: Gold Price Weekly Forecast: $2,100 on the radar but not risk-free
Gold price technical analysis
Gold price’s failure to provide a daily closing beyond a three-month-old ascending resistance line, around $2,068 by the press time, joined the overbought conditions of the Relative Strength Index (RSI) line, placed at 14, to witness a pullback on Friday.
The corrective move, however, could neither close below the 21-DMA support of $2,005 nor reverse the bullish signals from the Moving Average Convergence and Divergence (MACD) indicator.
Hence, the XAU/USD is likely to resume its run-up while targeting the previous monthly high of around $2,050 as an immediate hurdle. Following that, the stated trend line resistance can challenge the Gold buyers near $2,068 whereas highs marked in 2022 and 2020 close to $2,070 and $2,075 can act as additional upside filters before fueling the prices towards the latest peak near $2,080.
On the contrary, a daily closing below the 21-DMA support of $2,005 isn’t an open welcome for the Gold sellers as the $2,000 round figure and an upward-sloping support line from late March, around $1,985, can challenge the XAU/USD downside afterward.
It’s worth noting that the 50-DMA support of near $1,952 acts as the last defense of the Gold buyers.
Overall, Gold price grinds higher and can remain on the bull’s radar despite the latest pullback.
Gold price: Daily chart
Trend: Pullback expected
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
AUD/USD turns south toward 0.6400 as sentiment sours
AUD/USD is heading toward 0.6400, having faced rejection at 0.6450 early Monday. The Aussie fades the bounce, as the US Dollar finds fresh demand on souring risk sentiment amif China's property market concerns and the hawkish Fed outlook.
EUR/USD hovers around 1.0650, focus on German IFO survey
EUR/USD is keeping its range at around 1.0650, struggling for a clear direction in the Asian trading on Monday. Markets stay risk-averse, weighing the Fed's 'higher-for-longer' rate view and lingering China concerns. Germany's IFO survey eyed.
Gold remains steady above $1,920, focus on US data
Gold price hovers above $1,920 during the Asian session on Monday. The prices of yellow metal snapped a losing streak on Friday as the US Dollar (USD) trimmed its intraday gains, which could be attributed to the falling in the US Treasury yields.
Worldcoin Price Prediction: Is WLD done with uptrend after 77% rally?
Worldcoin price has paused its uptrend as it currently trades at $1.57. This move comes after the altcoin rallied a whopping 77% in just three days, between September 13 and 16. As WLD hovers aimlessly, investors need to be patient to catch the next volatile move.
Week ahead – US core PCE and Eurozone flash CPIs eyed after rate pause signals
PCE inflation to grab attention on Friday as Fed signals higher for longer. But markets might be more worried about a government shutdown. Eurozone flash CPIs will also be the in the spotlight on Friday. Chinese PMIs to be watched for recovery signs.