XAU/USD Current price: $2,018
- XAU/USD continues to decline from record highs despite declining US yields.
- The US Dollar extends its gains and adds pressure to XAU/USD.
- Economic data from the US shows mixed results; ADP data is scheduled for release on Wednesday.
The recovery in Gold spot during the Asian session proved short-lived as it resumed its decline, despite mixed US economic data and a decrease in US Treasury yields. This indicates that bearish pressure on the yellow metal remains intact.
Data from the US revealed that the number of job openings on the last business day of October was 8.7 million, down from 9.35 million in September, falling below the market expectation of 9.3 million. The ISM Services PMI surpassed expectations, rising to 52.7 in November compared to the expected 52. These data points suggest a more balanced labor market. Initially, this triggered a retreat in the Greenback, but it resumed its upward movement even as Treasury yields turned downwards.
The 10-year US bond yields dropped to 4.16%, reaching the lowest level since early September. Simultaneously, the US Dollar index reached multi-day highs above 104.00. The short-term bullish momentum remains in place for the Greenback, implying a negative outlook for Gold. On Wednesday, the focus will stay on US data, particularly the ADP Private Employment report, ahead of Thursday's Jobless Claims and Friday's Nonfarm Payrolls.
XAU/USD short-term technical outlook
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Gold dropped to test the $2,010 support level, which has acted as a barrier to further downside. A break below this level would increase bearish pressure, exposing the $2,000 area and the 20-day Simple Moving Average at $1,995. The next target below is $1,985 and $,1975.
The retreat from all-time highs has been significant, with the Gold price dropping by over $100. However, there still appears to be further downside potential, despite some technical indicators showing oversold readings. The momentum remains consistently bearish. Price stabilization could be observed if it remains above $2,010, with the initial resistance standing at $2,030. Bulls would need to see the price rise above $2,050 in order to signal a potential improvement in the short-term technical outlook. Expect elevated volatility to persist.
Support levels: $2,010 $1,985 $1,970
Resistance levels: $2,030 $2,045 $2,100
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