- Gold prices decline, hindered by rising US bond yields and the greenback’s resilience; XAU/USD is down 0.50%.
- Gloomy global economic outlook impacts sentiment, with disappointing export data from China and broadened US trade deficit.
- The US dollar gains momentum as the US Dollar Index (DXY) pares earlier losses, adding pressure on gold prices.
Gold price retraces after facing solid resistance at the confluence of technical indicators, as well as weighed by rising US Treasury bond yields and a gloomy global economic outlook, with China’s export falling more than estimates. The XAU/USD is trading at $1952.36, down 0.50%, after hitting a daily high of $1970.15.
Resilient USD and risk aversion adds to XAU’s downward pressure; the US trade deficit widens
XAU/USD is on the defensive, weighed by high US bond yields, with the 10-year benchmark note climbing more than ten bps, at 3.774%. US real yields are heading towards the 1.60% region, a headwind for the yellow metal. China’s data revealed that Exports declined 7.5% YoY in US Dollar terms, below estimates for a 1.8% drop; meanwhile, Imports fell a less-than-forecasts at 4.5% YoY in May, vs. an 8.1% plunge.
The greenback shifted positively, printing gains as shown by the US Dollar Index (DXY). The DXY, which tracks the USD performance against a basket of six currencies, pares its earlier losses, up 0.04%, at 104.078.
Risk aversion is another factor impacting Gold prices as Wall Street tumbles. The trade deficit in the United States broadened, as reported by the Bureau of Economic Analysis (BEA), mainly attributed to A notable dip in exports contributed to this shift, while imports rose sharply. The Balance of Trade came at $-74.6B in April of 2023, vs. March’s $-60.B. Exports declined compared to April, came at $249B vs. $258.2B, while imports rose by $323B above March’s $318.8B.
Gold Price Analysis: XAU/USD Technical Outlook
XAU/USD remains consolidated, capped within the boundaries delineated by the 20 and 100-day Exponential Moving Averages (EMAs), each at $1968.35 and $1937.43. The Relative Strength Index (RSI) indicator remains in bearish territory, while the 3-day Rate of Change (RoC) confirms a bearish bias in the near term. Therefore, the XAU/USD first support would be the 100-day EMA, followed by the $1900 figure. A breach of the latter will expose the 200-day EMA at $1889.01. Conversely, if XAU/USD buyers reclaim the confluence of the 20 and 50-day EMA at around $1968-$1970, that would open the door for a rally toward the $2000 mark.
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 holds positive ground above 1.0700, eyes on German CPI data
EUR/USD trades on a stronger note around 1.0710 during the early Monday. The weaker US Dollar below the 106.00 mark provides some support to the major pair. All eyes will be on the Federal Reserve monetary policy meeting on Wednesday, with no change in rate expected.
USD/JPY recovers 156.00 after testing 155.50 on likely Japanese intervention
USD/JPY has recovered some ground above 156.00 after crashing to 155.00 on what seemed like a Japanese FX intervention. The Yen tumbled in early trades amid news that Japan's PM lost 3 key seats in the by-election. Holiday-thinned trading exaggerates the USD/JPY price action.
Gold tests critical daily support line, will it defend?
Gold price is seeing a negative start to a new week on Monday, having booked a weekly loss. Gold price bears the brunt of resurgent US Dollar (USD) demand and a risk-on market mood amid Japanese holiday-thinned market conditions.
XRP plunges to $0.50, wipes out recent gains as Ripple community debates ETHgate impact
Ripple loses all gains from the past seven days, trading at $0.50 early on Monday. XRP holders have their eyes peeled for the Securities and Exchange Commission filing of opposition brief to Ripple’s motion to strike expert testimony.
Week ahead: FOMC and jobs data in sight
May kicks off with the Federal Open Market Committee meeting and will be one to watch, scheduled to make the airwaves on Wednesday. It’s pretty much a sealed deal for a no-change decision at this week’s meeting.