Bears are taking a breather but gold is on track for the fourth straight weekly drop
Spot gold stands at the back foot on Friday and holding in extended consolidation above new multi-month low ($1732) but holding bearish bias.
The metal is on track for the fourth consecutive weekly drop, with this week’s fall being the biggest since the second week of June 2021.
Gold came under increased pressure on growing expectations that the US Federal Reserve will remain aggressive in policy tightening in continuing efforts to put soaring inflation under control.
The dollar benefited from these expectations, along with increased safe haven demand on uncertainty and signals that the US economy is heading into recession.
US jobs data are in focus today and expected to show solid condition of the labor market that would add to Fed’s argument for another 0.75% rate hike in the central bank’s July policy meeting.
In addition, US inflation data are due next week and likely to show further rise that would additionally support Fed’s hawkishness and add to negative outlook for the yellow metal.
Bearish daily technical studies contribute to the action, although oversold conditions suggest bears may take a breather for consolidation / correction, before resuming.
Upticks should stay below resistances at $1786/$1800 (falling 10DMA / former low of May 16 / psychological) to keep larger bears intact.
Res: 1749; 1758; 1772; 1786
Sup: 1732; 1721; 1700; 1680