Gold price remains pressured for third consecutive day, eyes the first weekly loss in three.
Mixed sentiment in the market, downbeat Treasury bond yields underpin US Dollar rebound and weigh on XAU/USD.
Debt ceiling fears, banking woes allow Gold sellers to sneak in ahead of Michigan CSI, inflation expectations.
Gold price (XAU/USD) takes offers to refresh intraday low near $2,0src2 amid early Friday in Europe, marking the consecutive third daily loss amid the market’s fears emanating from the US debt ceiling negotiations and banking woes. Also exerting downside pressure on the Gold price could be the softer yields and a cautious mood ahead of more clues of the US inflation.
While portraying the mood, S&P 500 Futures print mild gains to differ from Wall Street’s mixed closing. However, the US src0-year and two-year Treasury bond yields remain pressured around 3.37% and 3.88% by the press time.
The recently escalating market fears surrounding the US debt ceiling expiry and banking fallouts, seem to allow the US Dollar to brace for the first weekly gain in three while pushing down the US Treasury bond yields for the third consecutive week.
Recently, the postponement of the debt ceiling talks between US President Joe Biden and House Speaker McCarthy and a slump in the share price of PacWest Bancorp appear the main negative developments to weigh on the sentiment. Additionally, warnings from US Treasury Secretary Janet Yellen and Beth Hammack, Chair of the Treasury Borrowing Advisory Committee and Co-Head of Goldman’s Global Financing Group, about US default, also threaten the market sentiment.
Alternatively, the softer US Consumer Price Index (CPI) and Producer Price Index (PPI) for April join mixed Federal Reserve (Fed) talks to prod the risk appetite.
Looking ahead, further developments to avoid the US default and defend the banking system may entertain Gold traders ahead of the preliminary readings of the University of Michigan’s (UoM) Consumer Sentiment Index (CSI) for May, as well as the UoM 5-year Consumer Inflation Expectations for the said month.
Also read: Michigan Consumer Sentiment Index Preview: Modest improvement not enough to boost the mood
Gold price technical analysis
Gold price remains bearish while justifying the downside break of a one-week-old symmetrical triangle and the 200-Hour Moving Average (HMA). Apart from the 200-HMA and the stated triangle’s bottom line, respectively near $2,024 and $2,027, bearish MACD signals and downbeat RSI, not oversold, also underpin bearish bias about the Gold price.
That said, the XAU/USD bears may currently target the previous Friday’s bottom of around the $2,000 round figure.
However, the monthly bottom of around $src,977, quickly followed by a late April swing low of around $src,974, can prod the Gold sellers afterward.
On the contrary, the 200-HMA and the stated triangle’s bottom line, close to $2,024 and $2,027 in that order, restrict short-term recovery moves of the Gold price.
Even so, a convergence of the triangle’s top line and the 38.2% Fibonacci retracement level, near $2,040, may challenge the XAU/USD upside.
In a case where the Gold Price remains firmer past $2,040, the metal buyers may witness the $2,050 hurdle as the last defense of the bears.
Gold price: Hourly chart
Trend: Further downside expected
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.