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Spot Gold Loses Ground as the US Dollar Recovers

Spot gold

Looking at the spot gold futures contract on the above one hour MT 4 price action chart, price action is trading below $1,735 per ounce during the Asian trade session on Thursday. Gold has seen an intra-session low of $1,731 per ounce.

Spot gold traders will listen to what Federal Reserve Chair Jerome Powell has to say as he is scheduled to give commentary. On the U.S. economic data calendar, the Labor Department is releasing weekly initial jobless claims as well as continuing claims jobs numbers.

The European Central Bank (ECB) will publish their monetary policy meeting account. As far as economic data is concerned, France will release their monthly trade balance and Germany will publish monthly factory orders data.

Also on the economic calendar, The United Kingdom is publishing monthly RICS housing prices data. The UK is also releasing monthly their construction purchasing managers’ index (PMI).

As President Joe Biden is talking, during a press conference, about how key his $2.25 trillion infrastructure plan is for job creation, Treasury yields are recovering which is bad for the gold bullion.

The fiscal stimulus plan will face stiff resistance in the U.S. Congress from both political parties. Gold did not pay much attention to the monetary policy meeting account from the Federal Reserve. The U.S. central bank has worries about the economic recovery.

Daily Spot Gold Technical Analysis (XAU/USD)

Looking at price action, spot gold (XAU/USD) has been unable to close above $1,740 per ounce several times. This is now causing traders to look lower to challenge the downside barrier in play at $1,730 per ounce as the U.S. dollar gains ground thanks to recovering Treasury yields.

With that said, the bullion is trading below the short-term 21 and fifty hour simple moving averages. The 50 hour simple moving average is in play near $1,738 per ounce. The relative strength index is also sloping lower and below the mid-line.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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