- Wall Street's main indexes fall sharply on Wednesday.
- 10-year United States (US) Treasury bond yield is down nearly 3%.
- US Dollar Index edges lower toward the 99 mark.
The XAU/USD pair build on Tuesday recovery gains and rose above the critical $1,500 mark before going into a consolidation phase a little below that level. As of writing, the pair was up nearly $20, or 1.35%, on the day at $1,499.
Risk-aversion continues to dominate the markets
The protracted selling pressure surrounding the Greenback and risk-off flows on Wednesday seem to be driving the pair higher.
Heightened fears of a possible recession in the United States after the Institue for Supply Management's (ISM) Purchasing Managers' Index (PMI) data on Tuesday showed that the business activity in the manufacturing sector contracted at its strongest pace in nearly ten years, caused risk-off flows to take control of the market action.
The 10-year US Treasury bond yield is now losing nearly 3% on the day and Wall Street's three main indexes are all down around 2% to confirm the sour market sentiment.
Earlier in the day, the Automatic Data Processing's (ADP) monthly report revealed that private sector employment in the US increased by 135,000 to miss the market expectation of 140,000 and forced the US Dollar Index (DXY) to push lower. At the moment, the DXY, which tested the 99 handle in the last hour, was erasing 0.1% at 99.10.
There won't be any other macroeconomic data releases from the US in the remainder of the day and the performance of major equity indexes in Asia is likely to impact the precious metal's action in the early trading hours of the Asian session.
Technical levels to watch for
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 edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.