Gold Price Analysis: XAU/USD ignores US dollar’s dead cat bounce to pick up bids above $1,830

Gold buyers defend $1,830 whilst Friday’s run-up pauses for fresh push to the north.
US NFP, percentage backed Biden, Yellen and Fed to dismiss rate hike pressure.
Equities, commodities cheered US dollar’s drop but lack of major reaction afterward confuse the brilliant metal bulls.
Update: Gold (XAU/USD) defends $1,830, up 0.20% intraday around $1,834.68, as traders steel oneself against Monday’s European session. In doing so, gold prices react to the US dollar’s failures to stay early Asia’s corrective pullback from rock bottom since late February. However, the upbeat US Treasury yields and stock futures keep gold buyers hopeful.

Gold cheers the risk-on mood that originally took clues from Friday’s US Nonfarm Payrolls (NFP) debacle. the newest push to the market sentiment should have arrived from the weekend comments of the Fed Minneapolis Boss Neel Kashkari who said, “The US market remains during a “deep hole”, needs aggressive support.” Also on the positive side might be the newest covid vaccine optimism from Eurozone and Australia.

Moving on, gold bulls got to follow the danger catalysts for fresh impetus.

Update: Gold (XAU/USD) is off the three-month highs, consolidating the US NFP disappointment-led rally in Monday’s Asian trading. a powerful bounce within the US Treasury yields combined with the upbeat market mood is capping the upside within the price of gold. The US yields are offering much-needed support to the greenback after the dollar got smashed on awful NFP figures released on Friday. The US economy added a mere 266K jobs in April vs. expectations of nearly 1,000,000 . Despite the rebound within the dollar and therefore the returns, the dovish Fed expectations are likely to stay gold’s bullish momentum intact. Immediate resistance for gold price is seen at the 200-daily moving average (DMA) at $1851.

Gold (XAU/USD) stays on the consolidation mode around $1,835 during the initial Asian session on Monday. Gold flashed a three-day rally while poking the first February tops on Friday after the US employment report for April helped American policymakers to defend the continuation of easy money policies.

It’s worth mentioning that hopes of further stimulus from US President Joe Biden and receding coronavirus (COVID-19) infections within the West, mainly thanks to a jump within the vaccinations, also are the explanations the gold buyers may need cheered lately .

Though, gold prices seek fresh push to on the track to the north and hence wobble around multi-day top afterward.

Can Friday’s US NFP defy reflation fears?
A disappointing Nonfarm Payrolls for April, 226K versus 1,000,000 expected, also as a 6.1% percentage against 5.8% forecasts, helped the US Federal Reserve System (Fed) squad, ex-Dallas Fed President Robert Kaplan, to defend their push for extended easy. Following that data, US President Joe Biden said that the roles report shows the economy isn’t in danger of overheating. Also within the same line were comments from US Treasury Secretary Jannet Yellen who said, “I doubt we are getting to see an inflationary cycle.”

The US financial institution policymakers are struggling lately because the jump in inflation figures keep pushing them towards normalization of heavy bond-buying and/or rate hike. an equivalent drag the US dollar index (DXY) and helps gold prices.

Not only the inflation figures but activity numbers and sentiment data also signaled the necessity to dial back the monetary easing.

Furthermore, US President Biden’s push for more stimulus and infrastructure spending are the extra reasons that magnify the necessity for the Fed’s alteration of monetary policy.

The Fed’s worries test gold buyers whilst the US dollar weakness kept them hopeful.

It should, however, be noted that a one-time disappointment from the US data might not be helpful to tame the reflation fears as US President Biden is ready for an additional multimillion aid package and therefore the bond-buying are just on the highest , propelling the US Treasury yields. Hence, traders will need more clues to increase the newest run-up and hence Thursday’s US Consumer price level (CPI) for April are going to be the key for gold traders.

Ahead of the discharge , the Australia and New Zealand Banking Group (ANZ) said, “Neither fixed income markets or breakevens bought into a softer inflation or recovery story on Friday night. We don’t think one soft data release alters the robust US growth outlook. Attention now turns to the April CPI release (Thursday). due to base effects, the headline number will push up strongly. The median expectations is trying to find 3.6% y/y vs 2.6% y/y in March. Core inflation, which was less affected last year when oil prices plunged, is predicted to be 2.3% y/y vs 1.6%. It’s all within the Fed’s level of tolerance, but nonetheless, it’ll be vital to observe the longer term path of inflation. therein regard, the services (ex-energy services) element of the report are going to be most noteworthy. Services structure 60% of the CPI which is where any sustainable rise in domestic inflation pressures will first become evident. Last time, that component rose 0.4% m/m.”

For the short-term direction, the coronavirus (COVID-19) updates and therefore the vaccine plans, recently cheered by the ecu Union (EU), could help gold traders. Further, chatters concerning Brexit and therefore the Scottish election may probe the gold bulls as both of them weighs on the market sentiment.

Talking about the info , second-tier figures from the US and China’s CPI could entertain gold traders before the key Thursday.

Technical analysis
Gold keeps an upside break of the 100-day SMA directed towards the 200-day SMA, respectively around $1,796 and $1,850, around $1,833 by the press time. However, the buyers seem to struggle recently, as portrayed by overbought RSI and Momentum indicator.

Although pullback moves may retest the previous resistance line from March 18, near $1,823, the $1,800 threshold and multiple highs marked since late April around $1,796-98 can test the further downside by gold prices.

It should, however, be noted that a daily closing below $1,796 will direct gold sellers towards a six-week-old support line near $1,785 that holds the key to the brilliant metal’s further weakness towards mid $1,700s.

Meanwhile, a transparent break above the 200-day SMA level of $1,850 may have to cross the February 10 high of $1,855 before challenging the February month’s peak of gold surrounding $1,875.

Overall, gold prices are on an upward trajectory but need a robust push to stay the recent rally.

Gold daily chart

Trend: Pullback expected

ADDITIONAL IMPORTANT LEVELS
OVERVIEW
Today last price 1832.84
Today Daily Change 1.57
Today Daily Change % 0.09%
Today daily open 1831.27

TRENDS
Daily SMA20 1777.19
Daily SMA50 1746.03
Daily SMA100 1797.15
Daily SMA200 1851.72

LEVELS
Previous Daily High 1843.4
Previous Daily Low 1812.94
Previous Weekly High 1843.4
Previous Weekly Low 1766.17
Previous Monthly High 1797.93
Previous Monthly Low 1705.84
Daily Fibonacci 38.2% 1831.76
Daily Fibonacci 61.8% 1824.58
Daily Pivot Point S1 1815.01
Daily Pivot Point S2 1798.74
Daily Pivot Point S3 1784.55
Daily Pivot Point R1 1845.47
Daily Pivot Point R2 1859.66
Daily Pivot Point R3 1875.93

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