Gold Price Forecast: XAU/USD plunges below $2,000 on robust US data, high US yields


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  • Gold slips below $2,000 down 0.50% spurred by elevated US bond yields as a consequence of solid data.
  • US Bureau of Labor Statistics (BLS) revealed the Nonfarm payrolls surpassed estimates, while the Unemployment Rate ticks down to 3.7%.
  • University of Michigan (UoM) data shows increased optimism among American households, inflation expectations downward revised.
  • Federal Reserve’s rate-cut expectations for 2024 decline to 118 basis points, according to the Chicago Board of Trade (CBOT).

Gold price retreats below the $2,000 mark for the first time since November 24, extending its losses to 0.50%, spurred by solid data from the United States (US). The XAU/USD is trading at $1996 after hitting a daily high of $2034.00.

XAU/USD’s retreated below $2,000, which could push prices further downwards

XAU/USD’s decline follows the latest US employment report showing the labor market is improving in contrast to recent data revealed during the week. The US Bureau of Labor Statistics (BLS) showed the economy created 199K jobs, exceeding forecasts of 180K, while the Unemployment Rate ticked down from 3.9%  to 3.7%.

That spurred a rally in the Greenback (USD), as shown by the US Dollar Index (DXY), remaining firm 0.40% above its opening price of 104.03, making dollar-denominated commodities more expensive. The US 10-year benchmark note yields 4.237%, eight basis points higher than Thursday’s close.

Additional data from the University of Michigan (UoM) showed that American households remain more optimistic about the economy while seeing an improvement in the battle against inflation as they downward revised inflation expectations.

All that said, traders paired slashed rate-cut bets on the Federal Reserve’s for the following year. Data from the Chicago Board of Trade (CBOT) suggests investors expect 118 basis points of rate cuts for 2024, below last week’s 140 bps. This means market participants see the Fed as less dovish than the previous week.

Aside from this, traders focus on the following week's US inflation report and the Federal Open Market Committee (FOMC) meeting. Inflation is expected to stay at 3.1% in twelve months, and monthly inflation will likely remain at 0%. The Core Consumer Price Index (CPI) is forecasted to stay at 4% unchanged YoY and 0.3% in monthly readings. Regarding the Fed, traders expect the US central bank to keep rates intact.

XAU/USD Technical Levels

XAU/USD

Overview
Today last price 1997.16
Today Daily Change -32.27
Today Daily Change % -1.59
Today daily open 2029.43
 
Trends
Daily SMA20 2001.93
Daily SMA50 1957.29
Daily SMA100 1940.42
Daily SMA200 1949.97
 
Levels
Previous Daily High 2040
Previous Daily Low 2020.27
Previous Weekly High 2075.43
Previous Weekly Low 2000.65
Previous Monthly High 2052.03
Previous Monthly Low 1931.67
Daily Fibonacci 38.2% 2032.46
Daily Fibonacci 61.8% 2027.81
Daily Pivot Point S1 2019.8
Daily Pivot Point S2 2010.17
Daily Pivot Point S3 2000.07
Daily Pivot Point R1 2039.53
Daily Pivot Point R2 2049.63
Daily Pivot Point R3 2059.26

 

 

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