Gold was trading sideways in the last two years, after reversing at around $2,070-80 in the summer of 2020. Although, the surging inflation which has forced central banks to turn hawkish helped improve the sentiment for safe havens earlier this year and the conflict in Ukraine gave Gold a boost, which sent the price above $2,000.

XAU/USD reached the high of $2,070 earlier this month, but failed to break above it and after the rejection, we saw a quick decline and the price fell below the 20 SMA (gray) on the daily chart. Buyers tried to have another go, but they gave up and now GOLD is headed lower again. the 50 SMA (yellow) provided support once this week, but it should be broken soon.

Gold Daily Chart – Reversing Down After the Failure at Resistance

Gold has declined below $2,000 again, as the market sentiment improves

Comments From Chicago FED President

• Expects 7 hikes this year and 3 next year
• Future developments may cause me to alter this assessment
• Will learn more through the year and will be prepared to adjust as needed
• Repeats call for ‘timely’ rate hikes with ‘cautious, humble and nimble’ approach
• It’s not a big risk if rate hike path includes some 50 bps hikes
• inflation reports should start to slow in H2
• Raising rates to just under 2.50% by March 2023 gives Fed ‘optionality’
• Don’t appreciate why Fed’s most recent rate-path projections have suddenly become stale
• Latest jobs report is not indicative of overheating

That’s 250 bps in hikes, total. The market is pricing in a 3% terminal rate in the middle of next year, so it’s roughly in line with that. There’s nothing new here from Evans. His comments today wrap up this week’s scheduled Fedspeak. The market is pricing in a 73% chance of 50 bps at the May 4 meeting.

US March Employment Report

US March Non-farm Payrolls

• March non-farm payrolls +431K vs +490K expected
• February payrolls were +678K(revised to +750K)
• Estimates ranged from +200K to +700K
• Two month net revision +95K
• Unemployment rate 3.6% vs 3.7% expected
• Prior unemployment rate 3.8%
• Participation rate 62.4% vs 62.3% prior (was 63.4% pre-pandemic)
• U6 underemployment rate 6.9% vs 7.2% prior
• Average hourly earnings +0.4% m/m vs +0.4% expected
• Average hourly earnings +5.6% y/y vs +5.5% expected
• Average weekly hours 34.6 vs 34.7 expected
• Change in private payrolls +426K vs +480K expected
• Change in manufacturing payrolls +38K vs +30K expected
• Long-term unemployed at 1.4m vs 1.2m pre-pandemic)
• The employment-population ratio 60.1% vs 61.2% before pandemic
• Full report

GOLD XAU Live Chart

[[XAU-graph]]