Gold has traded within a defined range over the past three months with neither buyers nor sellers able to gain the upper hand. Volatility has dropped to a multi-week low, while one technical indicator (CCI) shows the precious metal neither overbought nor oversold.
The recent bout of US dollar strength, underpinned by a move higher in longer-dated US Treasury yields, may soon weigh on the precious metal and test range support. Since gold is typically priced in US dollars, a stronger greenback makes gold more expensive for investors using other currencies, potentially reducing demand. The US dollar index (DXY) is now probing levels last seen at the start of May.
US Dollar Index (DXY) Daily Chart
This year’s ECB Forum on Central Banking starts in Sintra, Portugal, bringing together various global central bank governors, academics, and financial market representatives. On the Policy Panel today, beginning at 14:30 UK, is Fed chair Jerome Powell and markets will be listening to see if he gives any clues about the health of the US economy and monetary policy moving forward.
ECB Forum on Central Banking in 2024
This week also sees the release of a raft of US jobs reports and data, starting with the latest Jobs Openings and Labor Turnover Survey (JOLTs) at 15:00UK today. Job openings fell to 8.059 million in April, the lowest level since February 2021. Job openings are expected to fall further in today’s report to 7.90 million.
Tomorrow sees the release of the latest ADP employment numbers and the weekly initial jobless claims, before the main event of this week, Non-Farm Payrolls are released on Friday at 13:30 UK.
The US jobs data and chair Powell’s appearance at Sintra will be the main driver of any price action in gold this week. The precious metal is testing both the 20- and 50-day simple moving averages and a break below would bring range support into focus.
Gold Daily Price Chart
