- Gold bids retreated to near-term average prices after US data failed to give the signal.
- Stocks and commodities lost weight after US PMI figures disappointed expectations.
- Money markets are beginning to backtrack on rate cut expectations.
The pair XAU/USD failed to reach the $2,080 level, reversing course and retreating towards $2,050, as risk appetite deteriorated due to continued weak US economic data.
The U.S. manufacturing Purchasing Managers' Index (PMI) for December fell below investor expectations on Tuesday, falling to a four-month low of 47.9 from a stable forecast of 48.2 in November.
Market appetite was soured by the erroneous data, and investors are starting to soften their expectations for rate cuts from the US Federal Reserve (Fed), with average market expectations pegged at rate cuts by about 150 basis points until the end of the year. This contrasts with the Fed's own rate expectations dot plot, which currently forecasts a maximum of 75 basis points of rate cuts through 2024.
Market sentiment will be shaken this week as the first non-farm payrolls (NFP) for 2024 will be released on Friday. The December NFP is expected to show a slight decline in job creation, from 199,000 to 168,000 positions.
ISM Manufacturing and Minutes from the latest Fed meeting will be released on Wednesday, and ADP Employment Change and Jobless Claims data for the week ending December 29 will be released on Thursday.
XAU/USD Technical Outlook
Intraday action in Gold has XAU/USD falling towards the 200-hour SMA near $2,060, with short-term bids capped by the 50-hour SMA falling below $2,070.
In the daily candles, the
Prices remain above the 200-day SMA near $1,960, and the near-term price floor lies at the 50-day SMA just north of the $2,000 main price zone.
XAU/USD Hourly Chart
XAU/USD Daily Chart
XAU/USD Technical Levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
