On Tuesday, the gold price (XAU/USD) fell nearly 1% after higher US bond yields caused investment flows from the non-yielding yellow metal. Sentiment around the US dollar is also strengthening as Friday’s Non-Farm Payrolls data release draws near.
Gold price had soared on Monday as US stock markets fell. The attendant risk aversion caused the gold price to gain 0.51% on Monday, but a resurgent greenback has eroded these gains. US long-term bond yields rose 3.78% on Tuesday, boosting appetite for USD-denominated assets and generating new US dollar demand.
A stronger-than-expected ISM Services PMI number (61.9 versus consensus of 59.9) added intraday demand for the USD.
Gold Price Outlook
Tuesday’s downside move has truncated the rise in gold price following the break of the falling wedge. This move has violated the 1763.30 price level strongly, paving the way for a decline towards 1741.01. 1719.13 is an additional target to the south, as is 1699.43.
On the other hand, a resumption of the upside depends on a successful break of 1763.30. 1789.49 and 1800.00 could become the near-term targets to the north if this break is achieved. 1815.20 is an additional target that remains out of reach for now.