Gold Recovers After Finding Support at $2,000
Alex Boltyan | May 08, 2023 04:21PM ET
Gold recovered shine on Monday after being rejected from the $2,070 area last week as the cautious mood underpinned the yellow metal at the beginning of the week despite the increase in US bond yields.
The spot price, XAU/USD, is currently trading at the $2,020 zone, 0.25% above its opening price after the rejection from near record highs was contained by the $2,000 psychological area.
Better-than-anticipated nonfarm payrolls report boosted the dollar on Friday, sending the XAU/USD pair briefly below the $2,000 level. The US economy created 253,000 jobs in April, above the 179,000 expected, while the unemployment rate edged lower to 3.4%.
Despite the resilience of the US labor market, markets continue to anticipate the Federal Reserve will remain put when the board meets on June 13-14. The CME FedWatch Tool points to an 88% probability of no change versus 12% of a 25 basis points rate increase. For the July meeting, markets anticipate a 25 bps rate cut with a probability of around 30%.
These expectations have kept the greenback on the defensive, favoring the appreciation of the precious metal, which continues to trade within striking distance of its record highs in the $2,070-75 area.
From a technical perspective, XAU/USD maintains a short-term bullish outlook according to indicators on the daily chart, although their flat slopes point to a lack of momentum at the time being. At the same time, the price remains above its main moving averages, favoring the positive perspective, targeting record highs.
On the other hand, the immediate support level is given by the $2,000 area, followed by the $1,975 zone. If lost, the correction could deepen, with $1,930 and $1,910 as the following supports.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.