- Gold holds the lower ground amid firmer Treasury yields.
- XAU/USD needs a daily close below 21-DMA to extend the downside.
- A fresh batch of US consumer spending and consumption data awaited.
Gold (XAU/USD) rallied as high as $1790 in the Asian trading on Friday but gave up gains to reached fresh ten-day lows at $1756 after the US Treasury yields hit the highest levels in over two weeks on better-than-expected US Q1 GDP data. The US economy expanded at 6.4% in Q1 on an annualized basis, outpacing expectations of a 6.1% growth. The US weekly Jobless Claims data also came in stronger, reflecting strengthening post-pandemic economic recovery. Risk-appetite improved on the renewed economic optimism that weighed on the safe-haven US dollar, helping stage a modest recovery in gold. However, markets turned cautious, as concerns over rising yields resurfaced, which collaborated with gold’s rebound
This Friday, gold seems to have resumed the downside, as the Treasury yields attempt a bounce across the curve. Meanwhile, the US dollar holds steady, awaiting fresh cues from the Core PCE and personal spending data. Gold traders will continue to closely follow the risk trends, especially in light of the preliminary growth figures from Germany and the Eurozone. If the GDP numbers disappoint, it could reinforce risk-aversion across the board, knocking off higher-yielding assets such as US rates, in turn, putting a floor under gold. US President Joe Biden's additional push for a $1.8 trillion social stimulus package along with the infrastructure spending proposal also keeps the gold buyers hopeful.
Gold Price Chart - Technical outlook
Gold: Daily chart
Gold bears defy the bullish odds for the second straight session on Friday, despite the 14-day Relative Strength Index (RSI) ranging persistently within the positive zone.
The price of gold tested the upward-sloping critical 21-daily moving average (DMA), then at $1756, which is the line in the sand for the optimists.
A daily closing below the latter could extend the bearish momentum towards the 50-DMA at $1745.
The focus will then shift towards the horizontal trendline support at $1728.
Alternatively, the recovery attempts could likely remain capped around $1785-$1790, static resistance.
Further up, the critical 100-DMA barrier at $1799 could be back in play.
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 trades sideways below 1.0450 amid quiet markets
EUR/USD defends gains below 1.0450 in European trading on Monday. Thin trading heading into the Xmas holiday and a modest US Dollar rebound leaves the pair in a familair range. Meanwhile, ECB President Lagarde's comments fail to impress the Euro.
GBP/USD stays defensive below 1.2600 after UK Q3 GDP revision
GBP/USD trades on the defensive below 1.2600 in the European session on Monday. The pair holds lower ground following the downward revision to the third-quarter UK GDP data, which weighs negatively on the Pound Sterling amid a broad US Dollar uptick.
Gold price sticks to modest gains; upside seems limited amid USD dip-buying
Gold price attracts some follow-through buying at the start of a new week and looks to build on its recovery from a one-month low touched last Thursday. Geopolitical risks stemming from the protracted Russia-Ukraine war and tensions in the Middle East, along with trade war fears, turn out to be key factors benefiting the safe-haven precious metal.
The US Dollar ends the year on a strong note
The US Dollar ends the year on a strong note, hitting two-year highs at 108.45. The Fed expects a 50-point rate cut for the full year 2025 versus 4 cuts one quarter earlier, citing higher inflation forecasts and a stubbornly strong labour market.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.