XAU/USD bounce to $1,870 stays doubtful ahead of US NFP

2 weeks 21 hours ago #10374 by upamfva
XAU/USD bounce to $1,870 stays doubtful ahead of US NFP


Gold (XAU/USD) remains on the back foot, down 0.15% intraday around $1,870, heading into Fridays European open. The yellow metal slumped the most since late February the previous day as the US dollar benefited from the risk-off mood. However, the pre-NFP cautious sentiment seems to tease the gold bears of late.To get more news about WikiFX , you can visit wikifx.com official website.
  A triple attack day…
  US dollar index (DXY), a gauge of the greenback versus six major currencies, marked the biggest daily gains in three weeks on Thursday as market participants gathered clues of Fed tapering. Although US ADP Employment Change and ISM Services PMI mostly chattered, the Federal Reserves (Fed) scaling back of portfolio sales, the key program used to support the economy throughout the pandemic was the hidden catalyst favoring the tapering woes.
  Given the jump in fears of the Feds dialing back of the easy money, market players rushed to safe-havens, like the US dollar and Treasury bond, which in turn negatively affect gold prices.
  It‘s worth noting that the Asian session updates suggesting the US extension of the ban on Chinese companies and the arrest of a Hong Kong activist also added to the risk-off mood. However, the pre-NFP trading lull tames the market’s reaction to the news. Additionally, covid variant fears and talks over the global tax hike plans, backed by the US, also keep gold traders troubled.
  Hence, stock futures and Treasury yields are directionless but the DXY remains on the front foot near the three-week top by the press time. The same keeps confusing gold traders around the key support line.
  Looking forward, the US Nonfarm Payrolls (NFP) isn‘t the only catalyst to watch as a speech from US President Joe Biden and Fed Chairman Jerome Powell add filters to the market’s directions, as well as gold prices. Although upbeat expectations from NFP may keep gold sellers hopeful, Biden and Powell pose risk to the further downside.
  During the weekend, the first face-to-face meeting of the G7 Finance Ministers in London will be the key to watch as the EU and the UK want changes to Bidens proposal of a tax hike on bid corporations.
  Technical analysis
  Golds corrective pullback from a two-month-old ascending support line needs to cross a 12-day-old horizontal hurdle surrounding $1,890 before the buyers could check for return.
  Even so, the $1,900 threshold and the latest peak surrounding $1,917, will ask for gate passes from gold bulls.
  On the contrary, the strongest bearish MACD in three months and a downward sloping Momentum line, not oversold, suggest further weakness of gold prices.
  However, a clear break of $1,855, followed by the 200-day SMA level of $1,841, becomes necessary for the gold bears to keep the reins.
  Hence, golds movement between $1,890 and $1,841 becomes less convincing of any trend.

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