Gold continues to face challenge below $2,000

Spot Gold is bidding lower, testing back beneath the $2,000 key handle. The Gold Index (XAU/USD) is trimming back some gains as investors weigh their options post-US data.

Gold remains well-bid, but $2,000 is proving to be a challenging level. XAU/USD tipped back into a daily high above the $2,000 mark, at $2,006.48, but the key handle is proving a difficult target to nail down.

Gold is bidding back towards the downside as investor sentiment rolls over on the day and exposure goes uneven. At the time of writing gold is trading at $1991.14 per ounce.

On Wednesday, US Treasury yields increased once more. The 10-year T-note briefly returned to 4.445% before declining to 4.42%.

On the day that US Initial Jobless Claims unexpectedly dropped to a five-week low of 209K versus the forecast 225K, indicating some persistent tightness in the labour market, investor sentiment in the US is mixed.

According to the University of Michigan Consumer Inflation Expectations study, US consumers continue to have an optimistic view of inflation and anticipate it to stay at 3.2% for the next five years.


With price growth being something of a self-fulfilling prophecy, elevated consumer inflation expectations could mean that the Federal Reserve (Fed) is less likely to accelerate the path towards rate cuts, much to the chagrin of investors who have broadly been increasing bets on a sooner rather than later rate cut cycle.

Technically; gold’s snap decline in intraday Wednesday trading sees the XAU/USD slipping back from the $2,000 handle to challenge $1,990, descending into the 50-hour Simple Moving Average (SMA).

Despite the Wednesday backslide, Gold remains elevated, with XAU/USD up over 3% from the last swing low into the 200-day SMA near $1,931. $2,000 is proving to be a bit of a technical cap, and Spot Gold’s near-term trading range will be defined by whether or not the 200-day SMA can again support any declines into $1,940.