- XAU/USD came under renewed bearish pressure in early American session.
- Nonfarm Payrolls in the US declined by 140,000 in December.
Following the sharp decline witnessed in the early European session, the XAU/USD pair spent the last couple of hours moving sideways near $1,890. With the initial market reaction to the US labour market report, however, the pair slumped to its lowest level since December 30 at $1,876. Nevertheless, the greenback seems to be struggling to preserve its strength and XAU/USD was last seen trading at $1,888, losing 1.3% on the day.
USD weakens after NFP report
In the second half of the week, the precious metal struggled to find demand as heightened prospects for additional government spending in the US provided a boost to US Treasury bond yields.
The 10-year US T-bond yield rose nearly 13% since Wednesday and helped the greenback outperform its rivals while allowing the bearish pressure on XAU/USD to remain intact.
Meanwhile, the monthly data published by the US Bureau of Labor Statistics revealed on Friday that Nonfarm Payrolls in December declined by 140,000. This reading missed the market expectation for an increase of 71,000 by a wide margin and the US Dollar Index (DXY) spiked to 90.00.
However, the DXY quickly reversed its direction and fell into the negative territory near 89.70 as the disappointing jobs report in the US is likely to force the Federal Reserve to remain dovish.
NFP Quick Analysis: America loses jobs, Fed may come to the markets’ rescue, downing the dollar.
Technical levels to watch for
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