Spot Gold (XAU/USD) Next Week Outlook
Weak Nonfarm Payrolls should have been bullish for gold, but this time the market has moved in an unusual way with a sharp decline. The core driver is the strong rebound in U.S. Treasury yields. The 10-year U.S. Treasury yield has returned to the 5.25% level, while a strong U.S. dollar and renewed concerns about inflation have further weighed on the precious metal. Market expectations that the Federal Reserve will keep interest rates high for a prolonged period directly offset the near-term positive impact of the Nonfarm Payrolls. The effects of the earlier rate hikes are still continuing to suppress gold prices.
Technically, gold is trading in a weak range at the lower levels of 4110–4230. Rebound momentum is limited, and there is a risk of a second pullback after any rise. 4100–4110 is the key support area.
On the hourly chart, moving averages are tangled, with buyers and sellers at a stalemate. The current rebound is merely a recovery after a sharp drop.
Next week’s trading idea (reference):
Pull back to 4110–4125, confirm stabilization, then go long. Stop loss: 4095. Targets: 4185–4195.
If price rebounds to 4185–4195 and faces resistance, look to sell short. Targets: 4145–4155. If price spikes to 4215–4225, continue to sell short, with targets: 4155–4165#xau $XAU
Weak Nonfarm Payrolls should have been bullish for gold, but this time the market has moved in an unusual way with a sharp decline. The core driver is the strong rebound in U.S. Treasury yields. The 10-year U.S. Treasury yield has returned to the 5.25% level, while a strong U.S. dollar and renewed concerns about inflation have further weighed on the precious metal. Market expectations that the Federal Reserve will keep interest rates high for a prolonged period directly offset the near-term positive impact of the Nonfarm Payrolls. The effects of the earlier rate hikes are still continuing to suppress gold prices.
Technically, gold is trading in a weak range at the lower levels of 4110–4230. Rebound momentum is limited, and there is a risk of a second pullback after any rise. 4100–4110 is the key support area.
On the hourly chart, moving averages are tangled, with buyers and sellers at a stalemate. The current rebound is merely a recovery after a sharp drop.
Next week’s trading idea (reference):
Pull back to 4110–4125, confirm stabilization, then go long. Stop loss: 4095. Targets: 4185–4195.
If price rebounds to 4185–4195 and faces resistance, look to sell short. Targets: 4145–4155. If price spikes to 4215–4225, continue to sell short, with targets: 4155–4165#xau $XAU
