- Gold price is oscillating in a narrow range below $1840.00 as US yields refresh a three-month high above 4%.
- The USD Index is dealing with wild movements, which are generally followed by a volatility contraction.
- Tight US labor market looks to cool down ahead amid lower job postings on employment portals.
Gold price (XAU/USD) has delivered a downside break of the back-and-forth auction formed below the critical resistance of $1,840.00 in the Asian session. The precious metal has corrected gradually after a perpendicular upside move to $1,844.00.
The US Dollar Index (DXY) is dealing with wild movements, which are generally followed by a volatility contraction. S&P500 futures have surrendered their marginal gains and are now adding to Wednesday’s losses, portraying a rebound in the risk-aversion theme. Meanwhile, the 10-year US Treasury yields have refreshed their three-month high at 4.01%.
Wall Street Journal (WSJ) reported that figures from two large online recruitment companies ZipRecruiter Inc. and Recruit Holdings Co indicate a decline in the number of job postings in December. Contrary to that, the US Department of Labor reported huge job openings in December.
The Department clarified that more jobs are coming from restaurants, hospitals, nursing homes, and child-care centers and not from firms. Shark producers and big tech firms are focused on lay-off programs considering a dismal economic outlook. Therefore, the labor market could cool down sooner and the Federal Reserve (Fed), which is hiking rates to decelerate growth and inflation would consider the further decline in the policy tightening pace.
Gold technical analysis
Gold price is struggling to extend its reversal move above the horizontal resistance plotted from February 21 high at $1,843.90 on a two-hour scale. Earlier, the precious metal delivered a breakout of the downward-sloping trendline plotted from February 9 high at $1,890.27.
After a vertical move, a mean reversion to the 20-period Exponential Moving Average (EMA) at $1,831.50 is highly expected.
The Relative Strength Index (RSI) (14) has not surrendered the bullish range of 60.00-80.00, indicating that the upside momentum is still active.
Gold two-hour chart