Gold – XAU/USD Analysis – June 03, 2021

Upward Trendline Support

Gold prices were closed at $1910.35 after placing a high of $1912.05 and a low of $1896.75. On Wednesday, gold prices retreated from the five-month high level marked in the previous session. However, gold remained green for the day as the U.S. dollar index and the U.S. Treasury yield were depressed throughout the day. The U.S. Dollar Index that measures the greenback value against the basket of six major currencies remained flat on Wednesday at 89.91. The U.S. dollar tried to recover during an early trading session but reversed its course in the late session and remained flat throughout the day. Meanwhile, the yield on the benchmark 10-year note also declined and fell to 1.589%. The weak dollar and lower treasury yield added strength to the precious metal that shifted upward on Wednesday.

On the data front, at 18:45 GMT, the IBD/TIPP Economic Optimism surged in June to 56.4 against the forecasted 55.0 and supported the U.S. dollar that further caped upside in the yellow metal prices. Gold remains steady near the highest level in almost 5-months as traders await fresh comments from Federal Reserve officials for hints on the possible time frame for trimming the monetary stimulus. On Wednesday, the Philadelphia Fed President Patrick Harker said that it's appropriate to slowly and carefully move back on bond purchases at a suitable time. Officials have reiterated that they will begin scaling back buying when the economy has made substantial progress towards its goals. Many fed watchers believe that economy will reach the target levels later this year.

The growing demand for the haven asset driven by the signs of rising consumer prices and the risk of an uneven economic recovery has lifted gold prices to around $1900 an ounce. The attention of traders has been shifted towards releasing the U.S. nonfarm payroll report for May, scheduled to release on Friday. Investors will be eyeing for additional clues on the labor market's strength and whether growth will urge inflation that could prompt governments and central banks to decrease stimulus.

Gold Intraday Technical Level

Support Resistance

1900.85 1916.15

1891.15 1921.75

1885.55 1931.45

Pivot Point: 1906.45

Gold - XAU/USD - Technical Outlook 

The yellow metal gold is trading at a 1,898 level, crossing below the 20 and 50 exponential moving averages at a 1,903 level. At the moment, these exponential moving averages are extending resistance at 1,904 area, and closing of gold's price below this EMA are still adding selling pressure on gold. Other technical tools like RSI and MACD are supporting selling sentiment among investors. An upward trendline supports gold at the 1,895 level on the hourly timeframe, and break out of this level opens selling bias until 1,891 and 1,882. At the same time, resistance holds at 1,903 and 1,912 levels. All the best!