- The gold spot is falling due to broad US dollar strength and steady US real yields.
- US Industrial Production expànded at a lower rate than in April, showing that the US economy is slowing.
- Gold Price Forecast (XAUUSD): To consolidate amid the lack of a catalyst.
Gold spot (XAUUSD) drops courtesy of a buoyant greenback, which is staging a comeback after printing losses of 1% on Thursday, trimming some of those despite that US Treasury yields fall for the second straight day in the week. At the time of writing, XAUUSD is trading at $1839.20 and losses 0.97%.
US Real yields remain steady, weighing on Gold Prices
Sentiment remains positive as US equities recover some ground. The US Dollar Index, a measure of the buck’s value, advances 0.83%, sitting at 104.666. in the meantime, the US 10-year Treasury yield drops to 3.229%, for a loss of seven basis points.
In the meantime, US 10-year TIPS (Treasury Inflation-Protected Securities), a proxy for real yields, is down one basis point, sitting at 0.665%, a headwind for the yellow metal.
Elsewhere, the US economic calendar featured May’s Industria Industrial Production, which expanded by 5.8% YoY, lower than April’s reading at 6.3%, adding signs of an economic slowdown. “The pace at which everything is changing is quite alarming,” according to WSJ sources. They said that the economy still stands on fairly solid ground to withstand inflation, supply-chain issues, and rising interest rates.
Earlier in the day, the Minnesota Fed’s President Neil Kashkari commented that he supported 75 bps in June and could support another in July. He added that a prudent strategy might be to continue with 50 bps increases. St. Louis Fed President James Bullard said a soft landing is feasible if the post-pandemic shift is done well.
Gold Price Forecast (XAUUSD): Technical outlook
The XAU/USD is in consolidation amidst the lack of a catalyst that could propel the yellow metal prices either way. At the time of writing, XAU/USD sits below the 200-day moving average (DMA), which lies at $1843.48. That would open the door for consolidation in the $1800-$1850 range, where the non-yielding metal remained throughout the last week.
A daily close of XAU/USD beneath the 200-DMA would expose the Jun 1 daily low at $1828.33. A break below would open the door for a May 18 test at a $1807.23 cycle low. Once broken, a fall to $1800 is next.
Upwards, XAU/USD’s first resistance would be the 200-DMA. If XAU bulls achieve a daily close above it, a move towards the 50-DMA at $1874.80 is on the books. Once cleared, the XAU/USD following resistance level would be the 100-DMA at $1891.92.
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
AUD/USD under pressure below 0.7100 amid China concerns, USD rebound

AUD/USD remains pressured below 0.7100 amid fresh US-Sino trade concerns, surging China's covid cases and softening Australian inflation expectations. Investors reassess the US inflation data and its implications on the next Fed rate hike move.
EUR/USD corrects below 1.0300 as DXY strengthens ahead of US Michigan CSI

EUR/USD has tumbled to near 1.2850 amid a significant recovery in the DXY. A lower US CPI print has trimmed the odds of hawkish guidance while rate hike odds are solid. This week, the US Michigan CSI data will be of utmost importance.
Gold slips below $1,790 as DXY extends recovery, Michigan CSI eyed

Gold price has dropped to near $1,785.00 after surrendering the critical support of $1,788.00 in the Asian session. The precious metal has entered into a healthy correction phase after printing a fresh monthly high at $1,807.96 on Wednesday.
XRP price attempts a 15% rally on Ripple’s interest in buying Celsius' assets

XRP price shows a willingness to move above a significant resistance level, which it has attempted to do so for the past three months and failed each time. While this attempt is like any other and could fail, especially if the momentum is lacking.
FXStreet Premium users exceed expectations
_XtraSmall.png)
Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!