The current price of XAU/USD is 2,0331.60. Government bond yields and Fed’s speakers are currently influencing the market. Robust United States employment figures have further undermined the odds of a rate cut. The volatile price action of XAU/USD has not provided clear directional clues.
The spot Gold is hovering around $2,030 in the American session, with modest intraday losses on Thursday. The US Dollar has remained weak during Asian trading hours but has picked up some steam ahead of Wall Street’s opening. Market players are taking cues from yields and central banks’ speakers as there is an absence of relevant macroeconomic data.
The yield on the 10-year US Treasury note surged intraday to 4.16% following United States employment data. The country reported that weekly unemployment claims rose to 218K in the week ending February 2, beating the expected 220K. This robust data from the labor sector further undermines the odds of a rate cut. Meanwhile, remarks from Federal Reserve officials align with Chair Jerome Powell’s comments following the central bank monetary policy meeting. American policymakers are confident that inflation is heading in the right direction but maintain a cautious stance of waiting for more data to confirm this trend.
In terms of the short-term technical outlook for XAU/USD, the pair fell to an intraday low of $2,020.08, but recovered $10 afterwards. It is currently technically neutral according to the daily chart and is stuck around a directionless 20 Simple Moving Average (SMA). The longer moving averages remain far below the current level. Additionally, technical indicators have returned to consolidate around their midlines, reflecting the lack of directional conviction.
In terms of support and resistance levels, the support levels for XAU/USD are 2,022.75, 2,009.10, and 1,988.90. The resistance levels are 2,044.60, 2,053.10, and 2,065.60.
Insight: It seems that the market is currently trying to come to terms with the fact that rate cuts in the US could be less than initially expected this year. This lack of clarity is reflected in the technical outlook for XAU/USD, as indicators are not providing clear directional signals. Traders and investors may need to closely monitor the actions of the Federal Reserve and economic data in the coming weeks to gain a better understanding of the potential future direction of XAU/USD.
