Gold Price (XAU/USD) Remains Bearish on Firm US Dollar and Rising Bond Yields

Posted Monday, June 5, 2023 by
Arslan Butt • 1 min read

GOLD prices (XAU/USD) continue to be under pressure for the second consecutive day as the precious metal extends its decline to an intraday low near $1,945. This decline is mainly driven by a stronger US Dollar and rising Treasury bond yields following the latest Nonfarm Payrolls (NFP) data and geopolitical tensions.

The US Dollar Index (DXY) is showing mild gains around 104.12, rebounding from a one-week low, supported by market concerns over higher Federal Reserve (Fed) rates and the US-China tension. These factors, along with the escalating tensions between Russia and Ukraine, contribute to a risk-off sentiment that benefits the US Dollar and puts downward pressure on the price of Gold.

Moreover, increased odds of a Fed rate hike in June and reduced expectations of a rate cut in 2023 further support the US Dollar and bond yields, adding to the downward pressure on GOLD . However, recent stronger China PMI data and doubts about the Fed’s ability to sustain higher rates challenge the bearish outlook for Gold.

In terms of technical analysis, GOLD prices continue to decline, targeting the key level of 1945.20. Breaking below this level could pave the way for further bearish correction towards 1913.15. Only a breach above 1977.25 would signal a potential halt to the current decline and a possible attempt to regain the bullish trend.

Considering the overall sentiment and technical factors, GOLD is expected to maintain its bearish bias in the near term, with support around 1925.00 and resistance around 1960.00. However, the upcoming US Factory Orders and ISM Services PMI data could provide additional catalysts for market movement.

Technical Outlook:

GOLD prices are expected to continue the bearish bias with a target of 1913.15.

A break above 1977.25 would indicate a potential halt to the decline and a possible return to the main bullish trend.
The expected trading range for today is between 1925.00 support and 1960.00 resistance.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
0 0 vote
Article Rating
Notify of
Inline Feedbacks
View all comments