XAUUSD Trading Strategy - May 14, 2022
Gold fell to $1,800 for the first time in more than four months on Friday before starting to recover. Meanwhile, 10-year US Treasury yields remain positive above 2.9% after US data, limiting XAU/USD gains.
Spot gold (XAU/USD) prices continued to trade with a negative bias on the last trading day of the week, having hit their lowest level in more than three months, just above $1810 earlier in the session.
Basic overview
At current levels in the upper $1,810/ounce, gold is trading around 0.2% lower and looks set for a weekly decline of around 3.5%, which would mark the fourth straight week of bad weather. worst of red and yellow since June. Year 2021.
The main driver of gold's weakness this week has been the strength of the US dollar, with the Dollar Index (DXY) looking of course to end the week close to a multi-decade high at 104. .00 on. A stronger US dollar makes USD-denominated items like XAU/USD more expensive for international buyers.
Friday's buck's resilience comes despite a rebound in risk appetite that has seen a rally in equities and cryptocurrencies, said to be fueling safe-haven appeal. of gold. Price movements in the US bond market also did not favor the precious metal this week. While nominal yields (albeit higher on Friday) look set to end the week significantly lower, real yields were little changed.
That means lower inflation expectations (the 10-year breakeven points to be exact fell more than 20 bps this week to below 2.70%, the lowest since early March), implying demand reduced inflation protection. This hurts gold, as the asset is often seen as a hedge against inflation.
Speech by Fed Chairman Jerome Powell on Thursday did not seem to have much effect. He reiterated that he sees a 50 bps rate hike at upcoming meetings as appropriate. Upcoming on Friday, gold traders will be watching for the release of the University of Michigan Consumer Sentiment survey in May at 1500BST for more on how US consumers are holding up against the odds. inflation is still sky high.
Any new comments from Fed speakers that could move the needle regarding tightening expectations will also be worth noting. With XAU/USD breaking below the 200-Day Moving Average on Thursday, many technicians anticipate further declines towards yearly lows in the $1780 region.
Spot gold (XAU/USD) prices continued to trade with a negative bias on the last trading day of the week, having hit their lowest level in more than three months, just above $1810 earlier in the session.
Basic overview
At current levels in the upper $1,810/ounce, gold is trading around 0.2% lower and looks set for a weekly decline of around 3.5%, which would mark the fourth straight week of bad weather. worst of red and yellow since June. Year 2021.
The main driver of gold's weakness this week has been the strength of the US dollar, with the Dollar Index (DXY) looking of course to end the week close to a multi-decade high at 104. .00 on. A stronger US dollar makes USD-denominated items like XAU/USD more expensive for international buyers.
Friday's buck's resilience comes despite a rebound in risk appetite that has seen a rally in equities and cryptocurrencies, said to be fueling safe-haven appeal. of gold. Price movements in the US bond market also did not favor the precious metal this week. While nominal yields (albeit higher on Friday) look set to end the week significantly lower, real yields were little changed.
That means lower inflation expectations (the 10-year breakeven points to be exact fell more than 20 bps this week to below 2.70%, the lowest since early March), implying demand reduced inflation protection. This hurts gold, as the asset is often seen as a hedge against inflation.
Speech by Fed Chairman Jerome Powell on Thursday did not seem to have much effect. He reiterated that he sees a 50 bps rate hike at upcoming meetings as appropriate. Upcoming on Friday, gold traders will be watching for the release of the University of Michigan Consumer Sentiment survey in May at 1500BST for more on how US consumers are holding up against the odds. inflation is still sky high.
Any new comments from Fed speakers that could move the needle regarding tightening expectations will also be worth noting. With XAU/USD breaking below the 200-Day Moving Average on Thursday, many technicians anticipate further declines towards yearly lows in the $1780 region.
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