Gold stabilized near seven-month lows on Friday as the US dollar and bond yields, which hit new highs this week, took a breather and investors awaited US nonfarm payrolls data that could weigh on the outlook for Interest rates.
Spot gold was steady at $1,819.60 an ounce and was on track to post a second consecutive weekly loss, losing 1.6% so far. US gold futures rose 0.1% to $1,834.
Benchmark US 10-year bond yields retreated from a 16-year high, and the US dollar retreated from November 2022 highs, but remained on track for 12 consecutive weeks of gains.
Market anticipation for US employment data
“I think the market is not entirely convinced to go ahead at this point until the U.S. employment data is released,” said Ilya Spivak, head of global macro at Tastylive.
Markets await the release of US nonfarm payrolls data at 1230 GMT, following a series of employment indicators released this week.
“Inflation is multifaceted. To reduce the likelihood of interest rates not rising, we would need to see significantly higher unemployment and much lower energy prices,” said Michael Langford, chief investment officer at Scorpion Minerals Ltd.
Federal Reserve’s View on Treasury Yields
Federal Reserve officials on Thursday indicated little concern that the recent rise in U.S. Treasury yields could jeopardize a “soft landing” for the economy. They said it could actually help the central bank fight inflation.
SPDR Gold Trust, the world’s largest gold bullion exchange-traded fund, said its holdings on Thursday hit the lowest levels since August 2019.
Analysis and short-term outlook for gold and silver selling prices
Gold and silver: short-term technical update
Gold and silver prices take a breather after losses. This allows support levels to be strengthened. What are the key levels to watch for breakouts?
XAU/USD Analysis
In recent days, gold bullion has hit the brakes, pausing its losing streak since late September. Given recent price developments, how are the near-term technical outlook shaping up for precious metals?
On the daily chart below, we can see that commodity gold has confirmed a breakout under rising support from earlier this year. Meanwhile, a bearish Death Cross has recently formed between the 50-day and 200-day moving averages. As such, the technical outlook remains broadly focused on the downside.
In recent days, prices have confirmed a break below the midpoint of the 1848.37 Fibonacci retracement level. That now focuses attention on the current 2023 low of 1804.78 as immediate support. As such, a rebound is possible. However, the moving averages can serve as resistance, maintaining the broader bearish focus.
Otherwise, extending down exposes the 78.6% Fibonacci retracement level of 1714.83 as a medium-term bearish target.
XAG/USD Analysis
Meanwhile, silver prices face a similar scenario. Like gold, XAG/USD has confirmed a break above rising support. The losses from the previous week have led prices to test support, which is the 61.8% Fibonacci retracement level at 20.83.
A maintenance of support and a subsequent rebound would also shift attention here to the midpoint of the Fibonacci retracement, around 21.85. The latter may serve as resistance, potentially resetting the short-term bearish outlook.
Otherwise, continuing lower from here exposes the 78.6% level of 19.39 before last year’s support zone between 17.56 and 18.09 comes into focus.
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