Gold Prices Drop As US Dollar Strengthens Amidst Cautious Mood
The US dollar gathered pace on Thursday, weighing on gold prices, with the bright metal failing to capitalize fragile market mood following a negative Wall Street opening. On Wednesday, softer-than-expected US inflation data lifted expectations that the Federal Reserve will be pausing its tightening cycle next meeting, putting the dollar under interim pressure.
At the time of writing, spot gold XAU/USD is trading at the $2,015/oz area, 0.7% below its opening price and posting the second daily decline in a row.
Cautious market mood boosted the greenback amid banking sectors jitters and US debt ceiling concerns. Wall Street main indexes traded mixed, with the S&P 500 and de Dow Jones down, while the Nasdaq remains slightly up on the session.
The dollar rallied versus most competitors despite the decline in US bond yields. The US 10-year Treasury note yields 3.382%, with the rate down for a second consecutive day amid higher bond demand.
Despite the risk-off mood and lower bond yields, the yellow metal continues to struggle finding buyers, with the price pulling back from record highs and approaching the $2,000 level.
From a technical perspective, XAU/USD short-term perspective has turned slightly bearish according to indicators on the daily chart, although the price is resisting above the 20-day SMA, which stands as immediate support at $2,007.
Loss of the moving average will expose the $2,000 psychological area, targeting the critical $1,975 region. On the other hand, recovery of the $2,050 zone would improve the short-term outlook, putting focus back on the record highs at the $2,070-75 zone.
At the time of writing, spot gold XAU/USD is trading at the $2,015/oz area, 0.7% below its opening price and posting the second daily decline in a row.
Cautious market mood boosted the greenback amid banking sectors jitters and US debt ceiling concerns. Wall Street main indexes traded mixed, with the S&P 500 and de Dow Jones down, while the Nasdaq remains slightly up on the session.
The dollar rallied versus most competitors despite the decline in US bond yields. The US 10-year Treasury note yields 3.382%, with the rate down for a second consecutive day amid higher bond demand.
Despite the risk-off mood and lower bond yields, the yellow metal continues to struggle finding buyers, with the price pulling back from record highs and approaching the $2,000 level.
From a technical perspective, XAU/USD short-term perspective has turned slightly bearish according to indicators on the daily chart, although the price is resisting above the 20-day SMA, which stands as immediate support at $2,007.
Loss of the moving average will expose the $2,000 psychological area, targeting the critical $1,975 region. On the other hand, recovery of the $2,050 zone would improve the short-term outlook, putting focus back on the record highs at the $2,070-75 zone.
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