- A softer risk tone assisted the safe-haven gold to reverse modest intraday slide.
- Rebounding US bond yields underpinned the USD and capped gains for the metal.
- Investors now look forward to this week’s key US macro data for a fresh impetus.
Gold attracted some dip-buying near the $1,846 region on Tuesday and climbed back closer to the daily peak during the early European session. The overnight optimism led by the easing of COVID-19 lockdowns in China turned out to be short-lived amid doubts if central banks can hike interest rates to curb inflation without impacting economic growth. The worries resurface following the release of official Chinese PMIs, which showed contraction in both manufacturing and services sectors during May. This, along with concerns that the global supply chain disruption would continue to push consumer prices even higher, weighed on investors' sentiment and benefitted the safe-haven precious metal.
That said, resurgent US dollar demand kept a lid on any meaningful gains for the dollar-denominated gold. A sharp spike in the US Treasury bond yields assisted the USD to make a solid comeback from over a one-month low touched the previous day and acted as a headwind for the non-yielding yellow metal. Traders also seemed reluctant to place aggressive bets ahead of important US macro data, including the closely watched monthly jobs report (NFP), scheduled at the beginning of a new month. This makes it prudent to wait for strong follow-through selling before positioning for an extension of the recent bounce from a multi-month low, around the $1,787-$1,786 region touched on May 16.
This week's rather busy US economic docket kicks off with the release of the Conference Board's Consumer Confidence Index. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to gold prices. Apart from this, traders will take cues from the broader market risk sentiment to grab short-term opportunities around the XAUUSD.
Technical levels to watch
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
AUD/USD eases off multi-month highs above 0.6900 after dismal China's PMIs
AUD/USD is paring back gains below the multi-month highs of 0.6937 in the Asian session on Monday. The mostly downbeat business PMI reports from China's NBS and Caixin hit the sentiment around the Aussie amid a risk-rally in Chinese stocks on more stimulus measures to spur the economy.
USD/JPY trims gains to trade near 142.50 amid Japanese political updates
USD/JPY is trading at around 142.50 in Asian trading on Monday after facing rejection at 143.00. Negative Japanese equities drag the pair, as markets speculate about Japan's snap election. However, mixed Japanese data and China stocks rally cap the pair's downside.
Gold edges higher above $2,650 as traders brace for Chinese PMI data
Gold price recovers to near $2,665 during the early Asian session on Monday. The geopolitical risks and firmer expectation of another oversized interest rate cut by the Federal Reserve in November lift the precious metal.
Week ahead: NFP on tap amid bets of another bold Fed rate cut
Investors see decent chance of another 50bps cut in November. Fed speakers, ISM PMIs and NFP to shape rate cut bets. Eurozone CPI data awaited amid bets for more ECB cuts. China PMIs and BoJ Summary of Opinions also on tap.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.