Gold Price Analysis: XAU/USD pulls back from multi-week highs to $1,850

• Gold fell back to $1,855, taking daily losses to more than 0.5% after data revealed solid US jobs gains.
• However, it was also revealed that wage pressures have eased, which could ease the pressure on the Fed to tighten so aggressively.
• Pending US services PMI data and more Fed statements, XAU/USD continues to trade higher on the week.

Gold prices (XAU/USD) They fell on the heels of the latest official US labor market report, which revealed that 390,000 jobs were added in May, more than the forecast 325,000. Markets reacted “aggressively” to the data (i.e., reacted to price in a more aggressive Fed tightening outlook), with US bond yields and the dollar rising, and the 10-year yield rising by a 6 basis points and again approached the 3.0% level.

XAU/USD fell back to the $1,860 area from pre-data levels above $1,865, meaning it is now trading down around 0.5% on the day, having hit highs several weeks near $1,875 earlier in the session. However, the precious metal remains on track to post a modest weekly gain of around 0.3%, having found support earlier in the week following a pullback to its 200-day moving average at the $1,840 area.

With the latest US jobs data also revealing an easing in US wage pressures last month, some gold bulls might see the latest pullback as an opportunity to add to long positions and target to a retest of the weekly highs. Indeed, analysts had called the wage data in this month’s jobs report the most important, given the Fed’s focus on inflation. Gold traders should keep an eye out for the upcoming release of the US Services PMI data for May at 14:00GMT and Fed Vice Chair Lael Brainard’s remarks shortly thereafter.

Technical levels