Gold Outlook Remains Bearish at $1,750 as US Yields Firm up

• Gold price remains on the backfoot around $1,750, the lowest band of the range.
• Despite dismal NFP figures, the US dollar remained unaffected.
• US yields remain high, pointing at further losses in the gold.

The gold price outlook is bearish as the price wobbling near the lower end of the range. The major contributor to gold losses is strong US yields.

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Over the past week, gold prices fluctuated between $1,750 and $1,770 as they remained under pressure. Metal prices declined due to several factors, including a stable USD, higher US Treasury bond yields, and stock gains.

Despite small losses, the US Dollar Index (DXY), which tracks the dollar against six major competitors, remains strong at 94.10. This makes gold more expensive for holders of other currencies. Despite disappointing NFP data, the 10-year Treasury yield benchmark rose to 1.61% as investors remain concerned about continued higher inflation and expect an imminent Fed tapering in November.

Stock prices have recently declined, suggesting that risk aversion has supported precious metals at lower levels. For the day, S&P Futures trading at 4,367.50, down 0.33%.

As the dollar slid into bullish territory against a basket of competing currencies, gold prices fell in Asia on Monday. XAU/USD is currently trade at $1,751.29, down about 0.3% from a high of $1,758.40.

The Labor Department reported on Friday that non-farm jobs had risen by 194,000 over the past month. Reuters polled economists who predicted 500,000 employment growth. Despite Friday’s disappointing US labor report, the dollar did not drop. The disappointing numbers did not convince investors that the Federal Reserve would not cut asset purchases as early as November.

Inflationary pressures may persist in winter, though growth may be slower. Because of this, the Federal Reserve will not cut bond purchases until after the November 2-3 policy meeting despite possible slowdowns in growth.

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Gold price technical outlook: Bears to pounce $1,750

The gold price rejected from 200-period SMA on the 4-hour chart remains under the congestion of 50-period and 20-period SMAs. The price is consolidating while the volume is pointing at more bearish action. Any sustained move below the $1,750 mark may lead to the swing lows at $1,722. On the upside, $1,770 remains a key hurdle for the buyers ahead of the $1,800 mark.

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