- Despite daily gains, the XAU/USD is set to close a third consecutive week of losses, near the $1,920 area.
- Declining yields amid soft PCE figures weakened the USD favouring Gold prices.
On Friday, the gold spot XAU/USD traded with nearly 0.50% gains, jumping near the $1,920 area. Soft Personal Consumer Expenditures from the US fueled a decline in US yields and, thereby, a weaker US Dollar, which boosted the yellow metal. Moreover, the Gold’s short-term trajectory will be determined by bets on the next Federal Reserve (Fed) decision, which will have an impact with crucial labour market data to be released next week.
US reported soft PCE figures. Eyes on labour market data
After the US Bureau of Economic Analysis showed the Core Personal Consumption Expenditures (PCE), the Federal Reserve's preferred measure of inflation, unexpectedly decelerated to 4.6% YoY in May. As attention now shifts to labour market data, Investors are trying to decipher the next moves by the Fed after Chair Powell commented that Federal Open Market Committee (FOMC) foresee additional hikes, driven by a hot labour market.
In that sense, Non-farm payrolls (NFP) are expected to decline to 200K in June. In addition, Average Hourly Earnings are foreseeing remaining steady at 4.3% YoY and the Unemployment rate at 3.7%.
As for now, markets are discounting 25 basis points (bps) hike in the next Fed meeting in July but disagree when the second hike Jerome Powell hinted will come. Is worth noticing that non-yielding yellow metals tend to be negatively correlated with interest rates so hawkish bets on the Fed would apply further selling pressure.
XAU/USD levels to watch
The technical outlook, according to the daily chart, for the XAU/USD remains neutral to bearish for the short term. The Relative Strength Index (RSI) holds below its midline but with a positive slope, while the Moving Average Convergence Divergence (MACD) prints rising red bars.
Support levels to watch: $1,905, $1,900, $1,890.
Resistances levels to watch: $1,930, $1,938 (20-day Simple Moving Average), $1,945 (100-day Simple Moving Average)
XAU/USD Daily chart
-638237573946047023.png)
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 tumbles to 2024 lows near 1.0460
The US Dollar gathers extra pace and weigh on the risk complex, sending EUR/USD to new YTD lows near the 1.0460 region as the NA draws to a close on Thursday.
GBP/USD dips to multi-month lows around 1.2570
Further losses now motivate GBP/USD to revisit the vicinty of the 1.2570 zone for the first time since early May, always on the back of the strong move higher in the Greenback.
Gold faces extra upside near term
Gold extends its bullish momentum further above $2,660 on Thursday. XAU/USD rises for the fourth straight day, sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war. Markets await comments from Fed policymakers.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
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.