XAU/USD Current price: $1,826.8
- US Treasury yields soared following signs of a still tight labor market.
- Hawkish Federal Reserve officials fueled market concerns on Monday.
- XAU/USD approaches the year low set in February at $1,804.70.
Risk-off flows dominated financial markets on Tuesday, with the US Dollar appreciating further against most major rivals. XAU/USD fell to $1,815.19, its lowest since early March, as investors fear additional rate hikes in the US.
On the one hand, different Federal Reserve (Fed) officials remarked on Monday that inflation remains too high and repeated at least one more rate hike would be needed to keep price pressures under control. Additionally, officials reiterated rates should remain higher for longer. On the other, the United States (US) Bureau of Labor Statistics (BLS) reported that the number of job openings on the last business day of August stood at 9.6 million, much higher than the 8.8 million anticipated and signalling a still tight labor market.
Government bond yields sky-rocketed while stock markets plummeted, reflecting renewed fears. The 10-year Treasury note yielded as much as 4.79%, its highest in over sixteen years, while the 2-year note offers 5.13%.
XAU/USD short-term technical outlook
XAU/USD bounced from the aforementioned low but trades in the red. The daily chart shows that it posted a lower high and a lower low and fell for a seventh consecutive day, with technical indicators consolidating at extreme oversold levels, yet without any other sign of downward exhaustion. At the same time, the bright metal develops far below all its moving averages, with the 20 Simple Moving Average (SMA) heading south almost vertically at around $1,900 and reflecting the strong selling momentum.
The 4-hour chart shows that XAU/USD retains its bearish bias as technical indicators resume their slides after a modest bullish correction. Still, the Relative Strength Index (RSI) indicator holds below its 30 level while the Momentum hovers at multi-month lows. Finally, the 20 SMA heads firmly lower, far above the current level and below the longer moving averages. A strong static support level comes at $1,804.70, February monthly low, with a break below the level anticipating a continued decline in the near term.
Support levels: 1,815.20 1,804.70 1,792.10
Resistance levels: 1,833.35 1,845.20 1,858.30
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 extends slide below 1.0300, touches new two-year low
EUR/USD stays under bearish pressure and trades at its lowest level since November 2022, below 1.0300 on Thursday. The US Dollar benefits from the risk-averse market atmosphere and the upbeat Jobless Claims data, causing the pair to stretch lower.
GBP/USD slumps to multi-month lows below 1.2400 on broad USD strength
Following an earlier recovery attempt, GBP/USD reversed its direction and declined to its weakest level in nearly eight months below 1.2400. The renewed US Dollar (USD) strength on worsening risk mood weighs on the pair as trading conditions normalize after the New Year break.
Gold benefits from risk aversion, climbs above $2,640
Gold gathers recovery momentum and trades at a two-week-high above $2,640 in the early American session on Thursday. The precious metal benefits from the sour market mood and the pullback seen in the US Treasury bond yields.
These 5 altcoins are rallying ahead of $16 billion FTX creditor payout
FTX begins creditor payouts on January 3, in agreement with BitGo and Kraken, per an official announcement. Bonk, Fantom, Jupiter, Raydium and Solana are rallying on Thursday, before FTX repayment begins.
Three Fundamentals: Year-end flows, Jobless Claims and ISM Manufacturing PMI stand out Premium
Money managers may adjust their portfolios ahead of the year-end. Weekly US Jobless Claims serve as the first meaningful release in 2025. The ISM Manufacturing PMI provides an initial indication ahead of Nonfarm Payrolls.
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.