- Gold price kicks off a fresh week on a downbeat note, as bond rout extends.
- Hawkish Fedspeak, uptick in US wage inflation back aggressive tightening.
- Gold’s daily chart favors bears as Russia-Ukraine peace talks offer a ray of hope.
Despite the below-forecast US Nonfarm Payrolls, the upward revisions to the previous release and hotter than expected earnings growth bolstered the US dollar’s recovery rally alongside the Treasury yields. US payrolls arrived at 431K in March vs. 490K expected and the 750K previous upward revision. A relatively upbeat US labor market report boosted aggressive Fed’s tightening expectations, weighing down on the non-interest-bearing gold price. The bond rout resumed on hopes for a double-dose rate hike at the May Fed meeting, which propelled the Treasury yields higher across the curve. Meanwhile, the worsening Ukraine crisis added to the demand for the safe-haven US dollar, exacerbating the pain in gold price. XAUUSD closed the week in the red near the $1,925 area.
Gold price is extending the previous decline at the start of a fresh week this Monday, undermined by the extended bond rout, which has led to the inversion of the two-year and 10-year yield curve. Amidst holiday-thinned market conditions, with Chinese traders away, gold price is also feeling the pain from the dollar’s upside consolidative mode. Surging covid cases in China is sapping investors’ confidence, who are scurrying for safety in the buck, keeping any pullback in the US dollar index cushioned. Meanwhile, some optimism on the Russia-Ukraine front after last week’s peace talk also bodes ill for the yellow metal. A top Ukrainian negotiator said Saturday, “Ukrainian and Russian negotiators have reached an agreement on enough elements of a potential peace agreement that it is ready to be discussed between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky.”
Later in the day, the sentiment around the bond market and the incoming headlines from the scheduled peace talks will likely be the main market drivers, in absence of the top-tier US economic data releases.
Gold: Daily chart
Gold’s daily technical setup suggests that the tide has turned in favor of bearish traders, as the 14-day Relative Strength Index (RSI) has slipped gradually below the midline to now trade in the negative territory.
On renewed selling wave, gold price could retest four-day lows near $1,915, below which a fresh downside will open up towards the ascending 50-Daily Moving Average (DMA) at $1,900.
Further down, sellers will aim for the previous week’s low of $1,890, which emerge as a tough nut to crack for them.
Alternatively, should the recovery pick up pace, Friday’s high of $1,940 will be put to test. The horizontal 21-DMA at $1,950 will be seen as the next relevant resistance level.
The previous year’s high at $1,960 will be the level to beat for bulls.
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 recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
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.