As the US dollar (USD) resumes its decline from a two-month high. Reflecting the dramatic decline in US Treasury bond yields across the curve. The price of gold is attempting to extend its recovery from five-month lows of $1,885.
Risk trends will be a major factor in the price of gold.
Gold price is following Thursday’s Asian rebound moves, but this Friday’s lengthy retreat. In the US dollar makes bulls appear more committed. the yields on US Treasury bonds and the US dollar. As investors continue to trade cautiously. Following the overnight sell-off on Wall Street. Risk sentiment has remained muted in Friday’s Asian trading so far.
Despite hawkish Fed predictions and concerns about China’s economy, risk sentiment is still muted.
An enormous amount of risk aversion and an increase in demand for the safe haven. US Treasury bonds, were fueled on Thursday by concerns about China’s economic growth and expectations that the US Federal Reserve (Fed) would keep interest rates higher for longer. As a result, Treasury bond yields were sharply lowered from their recent peaks.
The benchmark yield on a 10-year US Treasury note reached its highest point in ten months at 4.3280% before falling down to close the day at 4.2520%, where it is now fluctuating. The US Dollar Index was corrected as a result of the US yields’ recent reversal in weakness. from two-month highs of 103.60, which assisted in limiting the weekly losses of the gold price.
The positive United States Jobless Claims data earlier in the day also helped to bolster the US Dollar. And US Treasury note yields. The number of Americans submitting new unemployment claims decreased by 11,000 to 239,000 last week. Indicating that the labor market remains tight despite a slowdown in job creation.
The price of gold is expected to decrease for the fourth consecutive week after enjoying strong two-way trading the day before, but the most recent recovery may gain traction as markets realign themselves in anticipation of the highly anticipated Fed’s annual Jackson Hole Economic Symposium the following week. The price movement of gold going into the weekly market report could potentially be influenced by the end-of-week flows. In the absence of any significant US economic data releases, close.
Technical analysis
The price of gold challenged the low of $1,886 set on March 15. While continuing to deviate to the south from the crucial 200-Daily Moving Average (DMA). Which is currently at $1,907.
For Gold purchasers on their road to recovery, the 200 DMA continues to be a tough nut to crack; above it. The next bullish goal will be aligned at the $1,920 round figure.
Any attempts at a comeback, though, are probably going to be fleeting. Because the daily technical setup indicates that the price of gold will go down.
As well as the 14-day Relative Strength Index (RSI) being significantly below the midline. The 21 DMA and 50 DMA Bear Cross are still in effect.
Consequently, the immediate assistance is evident. at the $1,886 five-month low. Below which the $1,870 static support may step in to save gold purchasers.
