- Gold price holds lower ground after reversing from one-week high, snaps three-day winning streak.
- US Treasury bond yields refresh multi-month highs amid inflation, rate hike fears.
- China-linked optimism fades ahead of G20; US data, Fed talks also weigh on sentiment and XAU/USD price.
Gold price (XAU/USD) seesaws around the intraday low of $1,831 during the first loss-making day in four heading into the European session. In doing so, the precious metal justifies the firmer US Dollar and risk-off mood in the market amid a sluggish Thursday.
US Dollar Index (DXY) bounces off a one-week low to 104.60 at the latest, up 0.17% intraday as the greenback bulls trace strong US Treasury bond yields, as well as cheer the sour sentiment amid hawkish Federal Reserve (Fed) talks.
That said, the US 10-year Treasury bond yields rose to the highest levels since early November 2022 by piercing the 4.0% mark, whereas the two-year counterpart rallied to the highest levels since June 2007 by flashing the 4.91% mark at the latest. The jump in the US Treasury bond yields portrays the market’s fears, which in turn probed bulls on Wall Street and weighed on S&P 500 Futures as of late.
While tracing the key catalysts, upbeat details of the US ISM Manufacturing PMI for February and headlines from the New York Times (NYT) suggesting the US-China likely tension, the Group of 20 (G20) meeting seems to gain major attention. On the same line could be the hawkish Minneapolis Federal Reserve (Fed) President Neel Kashkari, as well as the policymakers of the Bank of England (BoE) and the European Central Bank (ECB).
On the contrary, the recent pick-up in China activity data and upbeat comments from the policymakers of the dragon nation keeps the Gold buyers hopeful. China’s Human Resource Minister recently said, “China's employment will continue to improve this year and remains stable overall.” On Wednesday, China Finance Minister Liu He showed readiness to bolster the nation’s fiscal spending while also mentioning that the foundation of China's economic recovery is still unstable.
Moving on, updates from the G20 could join central bankers’ comments and the second-tier data from the US to entertain the XAU/USD traders.
Gold price technical analysis
Gold price stays depressed after reversing from a three-week-old horizontal resistance area, around $1,844-48. The pullback moves also coincide with the RSI (14) retreat from the overbought territory and bearish MACD signals to keep XAU/USD sellers hopeful.
However, a convergence of the 200 and 50 Simple Moving Averages (SMAs), near $1,827 by the press time, appears to be the key support to challenge the metal’s further downside.
Even if the quote drops below the $1,827 SMA confluence, the previous resistance line from February 09, close to $1,817, can act as the last defense of the Gold buyers.
Alternatively, recovery moves need to cross the $1,848 hurdle to convince XAU/USD bulls to aim for the early February tops surrounding $1,870. Following that, $1,890 and $1,900 could test the upside momentum ahead of directing the Gold price toward the previous monthly peak of $1,960.
Overall, the Gold price remains on the back foot even if the downside seems to have little room.
Gold price: Hourly chart
Trend: Limited downside 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
EUR/USD rebounds from multi-week lows, trades above 1.0750
EUR/USD came under heavy bearish pressure and declined to its weakest level in three weeks below 1.0750 on Friday after the stronger-than-expected Nonfarm Payrolls data. Week-end flows, however, helped the pair erase its daily losses.
GBP/USD remains on track to snap three-week winning streak
GBP/USD recovered toward 1.2550 after coming in within a touching distance of 1.2500 in the second half of the day after Nonfarm Payrolls came in at 199,000 for November. Despite the recent rebound, the pair remains on track to snap a three-week winning streak.
Gold retreats below $2,020 as US yields push higher
Gold broke below its daily range and declined toward $2,010 with the immediate reaction to the upbeat US November jobs report. Although XAU/USD managed to recover toward $2,020, rising US Treasury bond yields triggered another leg lower.
Bitcoin price could retrace to $42,000 if US Nonfarm Payroll comes in at 180,000
Bitcoin price just like other assets, is highly impacted by the macro-financial developments. This includes the Nonfarm Payrolls (NFP) report released by the BLS of the United States.
The week ahead – Fed, ECB and Bank of England rate decisions
When the Federal Reserve kept rates unchanged back in November for the second meeting in a row there was still the distinct possibility that the final meeting of 2023 would provide the possibility of one more rate rise to round off the year in line with Fed policymakers dot plot forecasts of 5.6%.