• Gold witnesses aggressive selling and tumbles to the daily low amid the post-NFP strong USD buying.
  • The upbeat report lifts bets for a 75 bps Fed rate hike in September, which further weighs on the metal.
  • The risk-off impulse could offer some support to the safe-haven XAU/USD and help limit further losses.

Gold comes under intense selling pressure during the early North American session and plummets to a fresh daily low, around the $1,765 area in the last hour.

The US dollar strengthens across the board on a stronger-than-expected employment report and turns out to be a key factor weighing heavily on the dollar-denominated gold. The headline NFP print showed that the US economy added a whopping 528K jobs in July, smashing expectations by a huge margin. Furthermore, the previous month's reading was also revised higher to 398K from the 372K, while the unemployment rate also surprisingly edged down to 3.5% from 3.6% in June.

The upbeat macro data lifts market bets for a larger Fed rate hike move at the September meeting, which further contributes to driving flows away from the non-yielding yellow metal. The odds of a 75 bps hike jumped to 70% from 40% before the jobs report and triggered a sharp spike in the US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond climbs back closer to the weekly high and exerts additional downward pressure on gold.

The prospects for more aggressive policy tightening by the Fed, meanwhile, tempered investors' appetite for riskier assets. This is evident from a fresh leg down in the equity markets, which could lend some support to the safe-haven gold and help limit any deeper losses, at least for the time being. Hence, any subsequent downfall is more likely to find decent support near the weekly low, around the $1,754 area, which coincides with a strong hurdle cleared last week.

Technical levels to watch

XAU/USD

Overview
Today last price 1769.2
Today Daily Change -22.00
Today Daily Change % -1.23
Today daily open 1791.2
 
Trends
Daily SMA20 1735.14
Daily SMA50 1790.53
Daily SMA100 1846.51
Daily SMA200 1842.01
 
Levels
Previous Daily High 1794.97
Previous Daily Low 1763.3
Previous Weekly High 1768.04
Previous Weekly Low 1711.55
Previous Monthly High 1814.37
Previous Monthly Low 1680.91
Daily Fibonacci 38.2% 1782.87
Daily Fibonacci 61.8% 1775.4
Daily Pivot Point S1 1771.34
Daily Pivot Point S2 1751.49
Daily Pivot Point S3 1739.67
Daily Pivot Point R1 1803.01
Daily Pivot Point R2 1814.83
Daily Pivot Point R3 1834.68

 

 

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