- Gold Price struggles to extend the previous day’s recovery from a two-week low.
- XAUUSD stays on bear’s radar unless crossing $1,915, multiple EMAs to test bulls before that.
- Treasury yields’ retreat probes US dollar bulls ahead of key data points, market sentiment dwindles.
Gold Price lacks upside momentum, despite bouncing off a two-week low the previous day, ahead of the key US employment data. In doing so, XAUUSD takes clues from sluggish markets, while also failing to cheer softer US Treasury yields and the US dollar retreat, amid mixed concerns.
US ADP, NFP to decorate calendar, Fedspeak eyed as well
To break the current deadlock, gold traders eagerly await monthly prints of the US ADP Employment Change, as well as Nonfarm Payrolls (NFP) for May, up for publishing on Thursday and Friday respectively. The data gains major attention amid the Fed’s latest hawkish commentary and recently upbeat US statistics that renewed calls for the central bank’s aggressive rate hikes. Should the scheduled figures match upbeat forecasts, the US Treasury yields and the US dollar’s anticipated recovery could weigh on the precious metal prices.
Also read: Gold Price Forecast: XAUUSD in search of a clear direction, awaits NFP
Recession woes keep Gold Price heavy
Recession woes
Global markets remain dicey on Thursday after Fed’s Beige Book, as well as comments from St. Louis Federal Reserve Bank President James Bullard, renewed growth fears. Fed’s Beige book raised concerns over economic growth in the US as the majority of districts indicated slight or modest growth while most informed of continued price rises. Also, three districts, out of 12, expressed concerns about a US recession. On the same line were comments from St. Louis Federal Reserve Bank President James Bullard also raised concerns about the US recession as he repeated that a pace of 50 bps hike per meeting is a “good plan” for now. However, Federal Reserve Bank of Richmond President Thomas Barkin mentioned, “You can't find a recession in the data or actions of business execs,'' speaking on Fox Business, which in turn tests the bullion bears.
Firmer US data raise doubts about the recession fears but the same increase the odds of the Fed’s aggression in rate hikes and weighs on market sentiment, as well as gold prices. The US ISM Manufacturing PMI for April rose to 56.1 versus the 54.5 expected and the 55.4 prior. Further, the US JOLTs Job Openings eased below 11.8 prior readings but matched 11.4 market forecasts.
Recession fears and upbeat US data join hawkish Fedspeak to underpin firmer Treasury yields, which in turn play a crucial part in challenging Gold Price. That said, the recent retreat of the benchmark 10-year US Treasury yields, down 1.4 basis points (bps) to 2.91%, fail to please equity buyers amid recession woes.
Headlines concerning China, suggesting a fresh trade war also weigh on the precious metal prices due to the dragon nation’s status as one of the world’s top gold consumers. It’s worth noting that Beijing’s economic hardships also raise questions over the global growth as it is the world’s second-largest economy. Reuters’ news suggesting the US readiness to implement a ban on Xinjiang goods also roil the mood in major markets. Further, comments from China's Ambassador to Australia, Xiao Qian, hint at no relief to Aussie business houses from Beijing’s ban despite the change in government.
Additionally, geopolitical fears surrounding Russia also weigh on the market sentiment and the bullion prices as the hawkish Fed lures safe-haven flows towards the US dollar. Recently, Moscow’s tough fight in Donbas spread pessimism.
Gold Price technical outlook
Gold Price again looks to poke the 200-day EMA level surrounding $1,856 as firmer RSI and bullish MACD signals favor the previous day’s rebound.
However, any further upside past $1,856 will need validation from a confluence of the 100-day EMA and the 50-day EMA near $1,876.
Should buyers manage to cross the $1,876 hurdle, a downward sloping resistance line from March, near $1,915 will be important to watch.
Alternatively, multiple supports around $1,810 and the $1,800 threshold will challenge the XAUUSD bears.
