- Gold attracts some dip-buying on Monday, though lacks bullish conviction.
- Renewed USD selling bias offers support to the dollar-denominated XAUUSD.
- Elevated US bond yields and the risk-on impulse caps the upside for the metal.
Gold reverses an early European session dip to the $1,667 area and climbs to a fresh daily top in the last hour, though lacks follow-through buying. The XAUUSD is currently placed around the $1,678-$1,680 region, just below a multi-week high touched in reaction to the mixed US monthly employment details on Friday.
The closely-watched US NonFarm Payrolls (NFP) report showed that the economy added 261K new jobs in October against the 200K anticipated. This, however, was well below the previous month's upwardly revised reading of 315K. Moreover, the unemployment rate rose to 3.7% from 3.5% in September and Average Hourly Earnings slowed to 4.7% YoY in October from 5% previous. The data fuels speculations that the Federal Reserve could slow the pace of future rate hikes and exerts some pressure on the US Dollar for the second straight day. This, in turn, offers some support to the dollar-denominated Gold, though a combination of factors keeps a lid on any meaningful upside for spot prices.
The markets, meanwhile, are still pricing in the possibility of at least a 50 bps Fed rate hike move in December. This remains supportive of elevated US Treasury bond yields and acts as a headwind for the non-yielding Gold. Apart from this, a goodish recovery in the US equity futures also contributes to keeping a lid on the safe-haven precious metal. Even from a technical perspective, spot prices, so far, have struggled to make it through a downward sloping trend-line resistance extending from the August swing high, warranting caution for aggressive bullish traders.
Hence, it will be prudent to wait for a sustained breakout through the aforementioned trend line hurdle before positioning for any further appreciating move for Gold. Traders also seem reluctant and might prefer to move to the sidelines ahead of the release of the latest US consumer inflation figures on Thursday. In the meantime, the US bond yields might influence the USD price dynamics in the absence of any relevant market-moving economic data. Apart from this, traders will take cues from the broader risk sentiment to grab short-term opportunities around Gold.
Technical levels to watch
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 regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.