Gold prices are on the rise again in the Asian session, after testing the significant psychological level of $1900 per ounce. Yesterday, strong data from the US contributed to the push towards $1900, but the price failed to stay below that level.
Despite concerns about a possible recession, recent US data, such as the ISM services and ADP reports, indicate the resilience of the US economy. This led market participants to adopt a more optimistic view on the Federal Reserve's potential rate hikes. Following the release of the data, money market pricing suggested an expectation of around 36 basis points of rate hikes by November, up from 28 basis points prior to the data releases.
The surge in US yields following the data put additional pressure on gold prices. The US 2-year Treasury yield briefly reached around 5.12%, the highest since 2007. Interestingly, the US dollar is struggling to maintain its gains, showing volatile price movements after the data releases.
As we approach today's Non-Farm Payrolls (NFP) and US jobs data, those who expect gold prices to fall will be hoping for another better-than-expected report to push prices below the $1900 per ounce mark. A positive release for the US economy would likely increase expectations of rate hikes and lead to higher US yields and a stronger Dollar Index (DXY). Consequently, this would bring down gold prices and result in a fourth consecutive week of losses for the precious metal.
So in summary, as per chart analysis, we would expect Gold to break the current range from the bottom to deep further before we could see some recovery to the upside, which will be most likely not before next week! This bearish move may take place from the $1920-$1928 price zone as highlighted in yellow with fibs levels on chart.
Despite concerns about a possible recession, recent US data, such as the ISM services and ADP reports, indicate the resilience of the US economy. This led market participants to adopt a more optimistic view on the Federal Reserve's potential rate hikes. Following the release of the data, money market pricing suggested an expectation of around 36 basis points of rate hikes by November, up from 28 basis points prior to the data releases.
The surge in US yields following the data put additional pressure on gold prices. The US 2-year Treasury yield briefly reached around 5.12%, the highest since 2007. Interestingly, the US dollar is struggling to maintain its gains, showing volatile price movements after the data releases.
As we approach today's Non-Farm Payrolls (NFP) and US jobs data, those who expect gold prices to fall will be hoping for another better-than-expected report to push prices below the $1900 per ounce mark. A positive release for the US economy would likely increase expectations of rate hikes and lead to higher US yields and a stronger Dollar Index (DXY). Consequently, this would bring down gold prices and result in a fourth consecutive week of losses for the precious metal.
So in summary, as per chart analysis, we would expect Gold to break the current range from the bottom to deep further before we could see some recovery to the upside, which will be most likely not before next week! This bearish move may take place from the $1920-$1928 price zone as highlighted in yellow with fibs levels on chart.
