- Gold price sees a negative start to the week, despite the NFP disappointment.
- Yellen’s taper talk revives the Treasury yields, stalls DXY’s decline.
- All eyes remain on the US CPI this week amid a tussle over US stimulus.
Gold price (XAU/USD) rebounded firmly from two-week lows of $1856 on Friday, staging a solid comeback after the US Nonfarm Payrolls disappointed with 559K in May. Markets believed the NFP miss would lift the pressure of the Fed to hike interest rates sooner, as the data point that the economy is not overheating. The US dollar was smashed across the board alongside the Treasury yields while the dismal data buoyed the stocks and bullion. The NFP report came to the rescue of the gold bulls, who were beaten by the reports that India and China offered discounts due to a covid-related dip in consumption. Also, pre-NFP positioning in the dollar pressured gold price. Despite the stellar performance on Friday, gold price ended the week in the red, below $1900.
Gold price extended last week’s dismal performance into a fresh week this Monday, tempered by US Treasury Secretary Janet Yellen’s comments over the weekend, which revived tapering expectations and lifted the yields. The US dollar index stalled its bounce amid a mixed market mood and taper talks. Gold price also feels the heat of the tussle between the White House and Republicans over the $1.7 trillion infrastructure spending plan. Attention now turns towards the US CPI report, in order to gauge the Fed’s next monetary policy path.
Gold Price Chart - Technical outlook
Gold: Four-hour chart
Gold’s four-hour chart shows that the price is challenging the upward-sloping 100-simple moving average (SMA) support at $1884, having faced rejection at the 50-SMA of $1896 on a couple of occasions.
Acceptance below that latter could expose the $1870 static support, below which the two-week lows could be retested.
The Relative Strength Index (RSI) edges lower below the midline, suggesting that there is additional room for declines.
Alternatively, a sustained break above the 50-SMA resistance is likely to threaten the falling trendline hurdle at $1900.
All in all, gold’s path of least resistance appears to the downside in the near term.
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 stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.