Gold Price Forecast: XAU/USD sees turbulence in the wake of mixed US data


  • The XAU/USD experiences minor losses, trading around the $2,040 level.
  • US December reports reveal ISM Services PMI dropping to 50.6, while NFPs exceeded expectations.
  • Market participants recalibrate Fed expectations following inconsistent economic data.

In the Friday trading session, the XAU/USD metal witnessed a downward trend, trading around the $2,040 level after jumping near $2,060. The metal showed volatility following the release of mixed US economic data, triggering which saw a strong US labor market but a weak Service sector. However, the markets rushed to re-adjust their dovish bets on the Federal Reserve (Fed) and are now betting on higher odds of a sooner beginning of the easing cycle.

In December, the US labor market showed robust performance as evidenced by the Nonfarm Payrolls report, which exceeded expectations by adding 216,000 jobs. This figure not only surpassed the consensus prediction of 170,000 jobs but also improved significantly from the previous month's addition of 173,000 jobs. Additionally, the Average Hourly Earnings witnessed a monthly increase of 0.4%, surpassing the consensus forecast of 0.3% and equalling the rate of the previous month, while the Unemployment Rate for the month remained stable at 3.7%, which was slightly lower than the anticipated 3.8%.

On the negative side, the Institute for Supply Management (ISM) Services PMI for December recorded a decline to 50.6, against a market expectation of 52.6, underperforming the previous figure of 52.7, which triggered a decline in the US Dollar, potentially limiting the downside for the metal for the rest of the session.

Elsewhere, US bond yields are on an upward trend which is pushing down the metal. The 2-year rate is trading at 4.40%, while the 5-year and 10-year yields jumped back above 4%. That being said, the upside for the yields may be limited as, according to the CME FedWatch Tool, markets are now betting on earlier rate cuts from the Fed. Specifically, the odds of a 25 bps cut in March rose to 70%. It will all come down to the incoming data, and next week, the US will release Consumer Price Index (CPI) figures from December, which may add volatility to the metal.

XAU/USD levels to watch

Reflecting upon the key indicators in the daily chart, the technical scenario illustrates an equilibrium between the buying and selling momentum. The Relative Strength Index (RSI) remains flat, indicating a balance in the buying and selling pressures, yet its location in the positive territory suggests an upper hand for the buyers.

The Moving Average Convergence Divergence (MACD) shows flat red bars, which typically signal a seller's momentum. However, the flatness points to stalling momentum rather than a dominant bearish attitude.

Considering the position of the metal in relation to the Simple Moving Averages (SMAs), it stands above the 20,100,200-day SMAs which implies a commanding bullish stance in the larger time frames.


XAU/USD daily chart

XAU/USD

Overview
Today last price 2041.69
Today Daily Change -1.43
Today Daily Change % -0.07
Today daily open 2043.12
 
Trends
Daily SMA20 2038.51
Daily SMA50 2012.18
Daily SMA100 1961.4
Daily SMA200 1962.48
 
Levels
Previous Daily High 2051.02
Previous Daily Low 2036.29
Previous Weekly High 2088.5
Previous Weekly Low 2052.98
Previous Monthly High 2144.48
Previous Monthly Low 1973.13
Daily Fibonacci 38.2% 2045.39
Daily Fibonacci 61.8% 2041.92
Daily Pivot Point S1 2035.93
Daily Pivot Point S2 2028.75
Daily Pivot Point S3 2021.2
Daily Pivot Point R1 2050.66
Daily Pivot Point R2 2058.21
Daily Pivot Point R3 2065.39

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD recovers toward 1.0850 as risk mood improves

EUR/USD recovers toward 1.0850 as risk mood improves

EUR/USD gains traction and rises toward 1.0850 on Friday. The improvement seen in risk mood makes it difficult for the US Dollar (USD) to preserve its strength and helps the pair erase a portion of its weekly losses. 

EUR/USD News

GBP/USD stabilizes above 1.2700 after downbeat UK Retail Sales-led dip

GBP/USD stabilizes above 1.2700 after downbeat UK Retail Sales-led dip

GBP/USD staged a rebound and stabilized above 1.2700 after dropping to a weekly low below 1.2680 in the early European session in response to the disappointing UK Retail Sales data. The USD struggles to find demand on upbeat risk mood and allows the pair to hold its ground. 

GBP/USD News

Gold rebounds to $2,340 area, stays deep in red for the week

Gold rebounds to $2,340 area, stays deep in red for the week

Gold fell nearly 4% in the previous two trading days and touched its weakest level in two weeks below $2,330 on Thursday. As US Treasury bond yields stabilize on Friday, XAU/USD stages a correction toward $2,340 but remains on track to post large weekly losses.

Gold News

Dogecoin inspiration Kabosu dies, leaving legacy of $22.86 billion market cap meme coin behind

Dogecoin inspiration Kabosu dies, leaving legacy of $22.86 billion market cap meme coin behind

Kabosu, the popular Shiba Inu dog that inspired the logo of the largest meme coin by market capitalization, Dogecoin (DOGE), died early on Friday after losing her fight to leukemia and liver disease.

Read more

Week ahead – US PCE inflation and Eurozone CPI data enter the spotlight

Week ahead – US PCE inflation and Eurozone CPI data enter the spotlight

Dollar traders lock gaze on core PCE index. Eurozone CPIs in focus as June cut looms. Tokyo CPIs may complicate BoJ’s policy plans. Aussie awaits Australian CPIs and Chinese PMIs.

Read more

Forex MAJORS

Cryptocurrencies

Signatures