- Gold rebounds from intraday low, prints two-day downtrend.
- Firmer US dollar weighs on the commodities during quiet session.
- Covid, Sino-American headlines join mixed Fedspeak to back the bears.
- Chart of the Week: Gold meets critical landmark
Update: Gold witnessed some aggressive selling during the early North American session and dived to two-and-half-month lows, around the $1,750 region in the last hour. The sharp intraday decline was sponsored by a broad-based US dollar strength, which tends to dent demand for dollar-denominated commodities, including gold. Investors remain concerned that the Fed will tighten its monetary policy if price pressures continue to intensify. This, along with a strong pickup in the US Treasury bond yields, acted as a tailwind for the greenback and further drove flows away from the non-yielding yellow metal.
Apart from this, the downfall could also be attributed to some technical selling following a decisive break below a one-week-old trading range support. A subsequent fall below the previous monthly swing lows, around the $1,763-62 region, might have already set the stage for an extension of the ongoing depreciating move. Hence, some follow-through weakness towards the $1,734-32 intermediate support, en-route the $1,720 level, now looks a distinct possibility. Market participants now look forward to the release of the Conference Board's US Consumer Confidence Index for some a fresh trading impetus.
Previous update: Gold added to the previous day's modest losses and witnessed some follow-through selling for the second consecutive session on Tuesday. The steady decline extended through the first half of the European session and dragged the XAU/USD to over one-week lows, around the $1,768 region in the last hour.
Despite mixed signals on the US inflation, investors have been betting on the prospects for an early move by the Fed to tighten its monetary policy. Apart from this, concerns about the spread of the more contagious Delta strain of the coronavirus acted as a tailwind for the US dollar and weighed on dollar-denominated commodities, including gold.
The greenback was further supported by a goodish pickup in the US Treasury bond yields, which was seen as another factor driving flows away from the non-yielding yellow metal. Meanwhile, the prevalent cautious mood around the equity markets did little to lend any support to the safe-haven gold or stall the intraday decline.
With the latest led down, gold confirmed a bearish break below a one-week-old trading range and now seems vulnerable to slide further. That said, investors might refrain from placing any aggressive bets, rather prefer to move on the sidelines ahead of Friday's release of the closely watched US monthly jobs report (NFP).
Hence, any subsequent fall is more likely to find decent support near monthly swing lows, around the $1,760 area. A convincing break below will set the stage for the resumption of the recent depreciating move witnessed since the beginning of this month.
Previous update: Gold (XAU/USD) regains $1,778 during the bounce off an intraday low as European traders prepare for Tuesday’s bell. Even so, the US dollar strength and challenges to the risk appetite keep gold sellers hopeful amid downbeat technical formation.
US dollar index (DXY) drops back to 91.90 while trimming the two-day gains. Although the pre-EU open consolidation seems to weigh on the dollar gauge, firmer US Treasury yields favor greenback bulls.
Mixed comments from the US Federal Reserve (Fed) policymakers and downbeat Dallas Fed Manufacturing Index figures dragged the US bond yields the previous day. However, fresh optimism over US President Joe Biden’s stimulus package and comparatively upbeat coronavirus (COVID-19) conditions in the US, versus that of Asia-Pacific and the UK, backs the Treasury yields after the heaviest drop in a week.
Wellington is up for lowering the covid alert after witnessing a sustained absence of the new virus cases but pandemic conditions seem to worsen in Australia. On the same line, the UK registered the highest infections since January 30 on Monday.
Fedspeak has recently been modest, as well as defensive, but Friday’s Core PCE Inflation renewed fears that the US central bank needs normalization of easy money policies. Considering that, Thomas Barkin, President of the Richmond Federal Reserve Bank, said on Monday, "The Fed has had substantial further progress against the inflation goal".
Elsewhere, US Secretary of State Antony Blinken’s comments over China also weighed on the market sentiment and put a safe-haven bid under the US dollar, indirectly challenging the gold prices. Blinken’s latest comments were, “China is ‘complicated’ when it comes to relations. Not asking anyone to choose between China and us.”
Against this backdrop, S&P 500 Futures remain pressured and so do Asia-Pacific shares. However, traders await fresh clues from US CB Consumer Confidence Index for June and additional comments from the Fed policymakers, not to forget Wednesday’s China official PMI, for fresh impulse.
Although the firming of the US data can exert downside pressure on gold, bears may remain cautious ahead of Friday’s US Nonfarm Payrolls (NFP).
Gold fades the breakout of the two-week-old falling trend line, portrayed the previous day, amid downbeat MACD signals. Also challenging the gold sellers is the 50-SMA and a descending resistance line from June 18.
That said, the latest bounce could be ignored until staying below the $1,782 resistance line while odds of its battle to a 50-SMA level of $1,780 can’t be ruled out.
It should, however, be noted that a clear break of $1,782 will aim for the $1,800 threshold whereas any further upside will be tamed by the prior support line from June 04, surrounding $1,827.
On the contrary, the immediate resistance-turned-support line near $1,769 holds the key to gold’s fresh downside targeting the monthly low near $1,761.
During the quote’s further weakness past $1,761, March’s top close to $1,755 may test the gold bears before directing them to the mid-April lows near $1,723.
Gold: Four-hour chart
Gold Price Forecast: XAU/USD remains on the backfoot below $1780 amid risk-off mood
Gold price analysis: Gold is sideways at $1770/oz – $1790/oz
USDX, Gold: The hunter and the prey
Additional important levels
|Today last price||1778.3|
|Today Daily Change||-0.29|
|Today Daily Change %||-0.02%|
|Today daily open||1778.59|
|Previous Daily High||1785.81|
|Previous Daily Low||1770.76|
|Previous Weekly High||1794.99|
|Previous Weekly Low||1763.66|
|Previous Monthly High||1912.79|
|Previous Monthly Low||1766.17|
|Daily Fibonacci 38.2%||1776.51|
|Daily Fibonacci 61.8%||1780.06|
|Daily Pivot Point S1||1770.96|
|Daily Pivot Point S2||1763.34|
|Daily Pivot Point S3||1755.91|
|Daily Pivot Point R1||1786.01|
|Daily Pivot Point R2||1793.44|
|Daily Pivot Point R3||1801.06|
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.
Follow us on Telegram
Stay updated of all the news
EUR/USD stays defensive below 1.0700 ahead of EU inflation data
EUR/USD is trading on the back foot below 1.0700, extending its sideways movement in early Europe. The US debt deal wins the House passage. Traders refrain from placing fresh bets on the pair ahead of the EU inflation data and the US jobs data.
GBP/USD eases below 1.2450 amid a steady US Dollar, ADP eyed
GBP/USD is retreating from 1.2450 in the European morning, as the US Dollar looks to stabilize following the recent sell-off. Markets digest renewed dovish Fed expectations and US debt deal passage ahead of the top-tier US ADP jobs and ISM Manufacturing PMI data.
Gold: $1,970, looming US employment clues prod XAU/USD bulls
Gold price teases bears after keeping the buyers hopeful in the last two days, retreating from the weekly top of late. In doing so, the yellow metal justifies the market’s dicey conditions.
Bitcoin likely to remain in red through the next quarter if history is any indication
Bitcoin (BTC) price produced a monthly close at $27,210, noting a -6.92% return for May. The last-minute slide in BTC put an end to the four-month bullish streak that kickstarted the 2023 rally.
US ADP Employment, ISM Manufacturing PMI Preview: First down, then up for US Dollar? Premium
With or without the debt-ceiling crisis, the US Dollar is on the rise – but every trend has a countertrend, and a double-feature release creates opportunities. Ahead of Friday's Nonfarm Payrolls (NFP), Thursday's release of two critical leading indicators is set to rock markets.