Gold snapped a three-week winning streak as the yellow metal struggled to stage a convincing rebound and closed the week in the negative territory below $1,770. XAU/USD looks to test $1,760, FXStreet’s Eren Sengezer reports.
Bearish shift in gold’s outlook
“The US Bureau of Labor Statistics will release the April Nonfarm Payrolls (NFP) figures on Friday. Investors expect the NFP to increase by 925,000. The wage inflation, as measured by the Average Hourly Earnings, will be a key detail in the US jobs report.”
“The US T-bond yields’ reaction to changing inflation expectations is likely to continue to impact XAU/USD’s action. 1.75% aligns as a significant resistance for the 10-year US T-bond yield and a move beyond that level could trigger a sharp decline in gold prices. On the other hand, XAU/USD could target $1,800, once again, in case yields turn south.”
“On the downside, the initial support is located at $1,760 (20-day SMA) ahead of $1,740 (50-day SMA/Fibonacci 23.6% retracement of the January-March downtrend). A daily close below the latter could open the door for additional losses toward $1,720 (static level).”
“The initial resistance aligns at $1,785 (Fibonacci 38.2% retracement) ahead of $1,800 (psychological level/100-day SMA(ascending line) and $1,820 (Fibonacci 50% retracement).”
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