- Positive US durable goods orders and consumer confidence data dampen Gold’s appeal.
- Surge in new home sales and climbing treasury yields add to Gold’s woes.
- Market participants closely monitor Fed Chair Powell’s upcoming remarks.
Gold price retreats after hitting a daily high of $1930.66 due to overall upbeat data from the United States (US), which portrays the economy’s resilience, despite higher borrowing costs set by the US Federal Reserve (Fed). US Treasury bond yields edge up a headwind for the yellow metal. The XAU/USD is trading at $1919, with losses of 0.18%.
XAU/USD under pressure as US and US Treasury yields surge
XAU/USD remains under pressure as market sentiment shifts positively. Durable Good Orders in the US surprised market participants by rising 1.7% MoM in May, above estimates of a -1% plunge, and 0.5% above April’s 1.2% data. Data eases fears for a hard landing in the US, as witnessed by Gold prices sliding, which is usually sought as a safe-haven asset in times of global economic slowdown.
In additional data, excluding transports, orders climbed 0.6%, above estimates for a -0.1% contraction, and topped April’s -0.6% fall.
The Conference Board (CB) recently revealed that Consumer Confidence in June improved to 109.7, crushing estimates of 104 and above May’s 10.5 figures. Comments made by Dana Peterson, Chief Economist at the Conference Board, showed that Americans’ mood is positive regarding finding a job, even though income expectations shrank slightly; at the same time, consumers see a decline in inflation ahead.
In other data, US New Home Sales advanced in May to their fastest rhythm in over one year, bolstering the US Dollar (USD), which continued to strengthen against precious metals prices. New Home Sales jumped 12.2% MoM vs. 3.5% in April and were at a seasonally adjusted annualized rate of 763K homes, as the US Department of Commerce revealed.
Meanwhile, the US Dollar Index (DXY), which tracks the buck’s value against a basket of peers, drops 0.20%, at 102.552; but US Treasury bond yields advance. The US 10-year Treasury note yields 3.772%, gains 4.2 basis points, and underpins US real yields from Monday’s close of 1.54%, to 1.592%, a headwind for XAU/USD.
Given the backdrop, and with the US Federal Reserve (Fed) Chair Jerome Powell speaking at the European Central Bank (ECB) Sintra event, it would likely keep XAU/USD’s prices within a narrow range as traders dissect Powell’s comments. Of late, the Fed Chair remained neutral to hawkish, though it has repeated that two more rate hikes are on the table, even though the CME FedWatch Tool shows market participants do not believe the Fed will raise rates past the 5.25%-5.50% range.
XAU/USD Price Analysis: Technical outlook
XAU/USD remains neutral-to-downward biased after a bearish cross happened on June 7, with the 20-day Exponential Moving Average (EMA) dropping below the 50-day EMA. At the time of writing, the 20-day EMA is closing the distance related to the 100-day EMA, which sits at $1937.88 and acts as strong dynamic support, with XAU’s buyers unable to crack the level. If XAU/USD extends its losses past $1900, the next support level will be the 200-day EMA at $1895.65. A breach of the latter and XAU/USD could slide towards the next swing low, the March 8 daily low of $1809.48.
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 climbs to daily highs near 1.0770 on Dollar selling
EUR/USD manages to regain extra upside traction on the back of the renewed sell-off in the Greenback, reaching fresh daily highs in the 1.0770 region, or. two-day peaks.
GBP/USD hovers around 1.2500 post-BoE
GBP/USD alternates gains with losses around the 1.2500 neighbourhood amidst extra weakness in the Dollar, while market participants continue to digest the BoE event.
Gold improves to multi-day highs past $2,330
XAU/USD now gathers fresh steam and advances to the highest level in many sessions north of the $2,330 mark per troy ounce on the back of further selling pressure hurting the Greenback as well as mixed US yields.
Solana meme coins TREMP, BODEN rise after Donald Trump’s pro-crypto stance
Solana-based meme coins TREMP and BODEN post nearly 125% and 7% gains on Thursday. Former US President Donald Trump says his campaign will likely accept crypto donations.
Bank of England inches one step closer to a summer rate cut
The Bank of England is undoubtedly turning more optimistic, but it’s keeping its options open amid some uncertainty surrounding the near-term inflation numbers. We still narrowly expect the first rate cut in August.