Gold was closed at $1805.50 after hitting a high of $1809.45 and a low of $1788.50. GOLD fell on Thursday after the US Treasury yield on the benchmark 10-year note reversed course and surged unexpectedly. The US Treasury Yields were higher near one-week highs at 1.83% after the Bank of England increased rates one more time. This move boosted expectations that the US Federal Reserve will take a similar decision in its March meeting. Fed officials have already signaled that they will start raising the interest rate from March to curb the effects of high inflation.

Gold is regarded as an inflation hedge, but rising US Treasury yields raised the opportunity cost of holding non-interest-bearing bullion on Thursday, weighing on gold prices. However, the losses in the precious metal were limited on the day due to the weak US dollar.

The US Dollar Index, which measures the greenback’s value against the basket of six major currencies, continued to decline for the fourth consecutive session and reached its lowest in 13 days at the 95.24 level. Despite having better than expected jobless claims and an ISM Services PMI report, the dollar remained under pressure on Thursday because Fed rate hikes were already priced in full and rival currencies like the Euro and GBP were gaining strength. The euro was higher due to ECB President Christine Lagarde’s hawkish comments, which raised expectations of faster than expected monetary tightening. Meanwhile, the British pound was also higher against the US dollar on Thursday after the Bank of England raised interest rates.

On the data front, at 18:30 GMT, the unemployment claims from the past week dropped to 238K against the expected 245K and supported the US dollar. The Prelim Nonfarm Productivity for the quarter surged to 6.6% against the forecast 3.8% and weighed on the US dollar. The preliminary unit labor cost for the quarter fell to 0.3%, compared to the predicted 1.1%, weighing on the US dollar. At 19:45 GMT, the Final Services PMI remained flat with expectations of 51.2. At 20:00 GMT, the ISM Services PMI surged to 59.9 against the forecast 59.5 and supported the US dollar. Factory orders remained unchanged at -0.4%. Most data from the US came in favor of the greenback, which ultimately added losses to XAU/USD.

Gold (XAU/USD) Technical Outlook

On Friday, the technical side of gold continues to remain unchanged at $1,805 ahead of US NFP figures. Gold completes a 38.2 percent Fibonacci retracement at $1,808 before reversing bearishly. Gold is currently trading at $1,805 and is heading south towards an immediate support level of $1,799. On the lower side, gold’s next support level is at 1,791, which is extended by a double bottom level.

On the bullish side, XAU/USD may encounter resistance at the $1,809 level. The uptrend can be extended by 50 percent or 61.8 percent Fib levels until the $1,818 or $1,826 level. Because the MACD is above 0, the chances of a buying trend remain high. So, consider remaining bullish if the price crosses above 1,809, and vice versa. Best wishes!