Gold Price Forecast: XAU/USD slides below $1,760 on rising US T-bond yields
- XAU/USD lose traction against the greenback, on broad US dollar strength across the board.
- US T-bond yields edged higher throughout the day, weakening the non-yield metal.
- On Wednesday, the ADP Employment Change could give investors an advance of the Nonfarm Payrolls report.
Gold (XAU/USD) is edging lower for the first time in four days, is trading at $1,759.70, losing more than half percent during the day at the time of writing.
The market sentiment is upbeat, portrayed by US stock market indices, which trimmed Monday’s losses, gaining between 0.55% and 1.44%. Meanwhile, the US Dollar Index, which tracks the buck’s performance against six peers, is up 0.18%, sitting at 93.98, underpinned by the rise in US T-bond yields.
The US 10-year benchmark note rate heightened almost five basis points (bps), finishing the New York session at 1.529%.
From Wednesday until Friday, US Jobs data takes center stage
The US economic docket will feature critical macroeconomic data to help traders gauge the yellow-metal next movement. On Wednesday, the ADP Employment Change for September, the market expects an increase of 428K new jobs against the 374K in August. By Thursday, the US Initial Jobless Claims for the week ended on October 1 are expected at 350K. On Friday, the US Bureau of Labor Statistics will release the Nonfarm Payrolls report. The market expects the creation of 488K new jobs in the US economy.
Federal Reserve Chairman Jerome Powell said that one good employment report would convince him about the bond tapering process. If the outcome is as Chair Powell expected, the bond tapering announcement could be made in FOMC's November meeting.
XAU/USD Price Forecast: Technical outlook
Daily chart
Gold spot price remains well below the daily moving averages (DMA’s), suggesting downside bias. Additionally, a daily close within the Monday price action could form a bearish-harami pattern, though it will require validation.
If XAU/USD sellers would like to resume the downtrend, they need a breach below the October 5 low, at $1,747. In case of that outcome, a move towards $1,687 is on the cards. However, there would be some hurdles on the way. The first support would be the September 29 low at $1,721, followed by $1,700.
On the other hand, if gold buyers would like to regain control, they need a daily close above the 50-day moving average (DMA) at $1,782. Once this is achieved, the following key resistance levels would be the 200-DMA at $1,800 and the 100-DMA at $1,808.
The Relative Strength Index (RSI) is at 46, edging slightly lower, supporting the downside bias, so another leg down might lie ahead.
