Gold declines on surprising positive US data

Gold has declined due to positive US data, including durable goods orders and consumer confidence data. The gold price has retreated after hitting a daily high of $1930.66 due to overall upbeat data from the US, demonstrating the economy’s resilience despite higher borrowing costs set by the US Fed. Gold is trading at $1912.94 at the time of writing.

The US Treasury bond yields have edged up a headwind for the yellow metal, with the XAU/USD trading at $1919 with losses of 0.18%. Durable Goods Orders in the US rose 1.7% MoM in May, easing fears of a hard landing in the US. The Conference Board revealed that Consumer Confidence in June improved to 109.7, crushing estimates of 104 and above May’s 10.5 figures.

US New Home Sales advanced in May to their fastest rhythm in over one year, bolstering the US Dollar (USD), which continued to strengthen against precious metals prices. New Home Sales jumped 12.2% MoM vs. 3.5% in April and were at a seasonally adjusted annualized rate of 763K homes. The US Dollar Index has dropped 0.20%, at 102.552, but US Treasury bond yields advance, underpining US real yields from Monday’s close of 1.54% to 1.592%.

Fed Chair Jerome Powell’s comments at the European Central Bank (ECB) Sintra event may keep XAU/USD’s prices within a narrow range as traders dissect Powell’s comments. The Fed Chair has remained neutral to hawkish, with two more rate hikes on the table, but market participants do not believe the Fed will raise rates beyond the 5.25%-5.50% range.

XAU/USD remains neutral-to-downward biased after a bearish cross on June 7, with the 20-day Exponential Moving Average (EMA) dropping below the 50-day EMA.

If XAU/USD extends its losses past $1900, the next support level will be the 200-day EMA at $1895.65. A breach of the latter could lead to the next swing low, the March 8 daily low of $1809.48.