On Friday, the gold price pulled back from the session highs of about $4,480 to trade at about $4,238 after the US jobs data. The XAU/USD also completed a downward breakout from a descending channel formation in the 60-minute chart.
The price of the yellow metal has now fallen to trade several levels below the 100-hour moving average line. As a result, it has since plummeted into the oversold levels of the 14-hour RSI.
Gold Price Fundamentals Overview
From a fundamental perspective, the XAU/USD trades during a relatively busy period in the US market. On Friday, US nonfarm payrolls for May came in better than expected, with 172k versus a forecast of 85k, down from the previous month’s equivalent of 179k. The unemployment rate for the month came in as expected, at 4.3%, unchanged from April. The average hourly wage growth for the period also matched the forecasted (MoM) and (YoY) changes of 0.3% and 3.4%, respectively.
On Thursday, the US initial jobless claims for last week came in higher than expected, with 225k versus a forecast of 213k, up from the previous week’s equivalent of 212k. On the other hand, nonfarm productivity for Q1 fell short of the forecasted change of 0.8%, with a change of 0.3%, while unit labor costs for the quarter missed 2.3%, with a change of 1.8%.
Earlier in the week, the US ISM Services PMI for May outperformed the expectation of 53.8, with a reading of 54.5, up from the previous month’s equivalent of 53.6. On the other hand, the S&P Global Composite PMI for last month missed the expectation of 51.7, with a reading of 51.5, down from 51.7.
Gold Price Technical Analysis (the 60-min Chart)
Technically, the gold price has recently completed a downward breakout from a descending channel formation in the 60-minute chart. The 14-hour RSI also supports a bearish bias after entering oversold conditions.
Therefore, the bears will look to extend the latest pullback towards $4,247 or lower to $4,171. On the other hand, the bulls will look to pounce on rebounds at about $4,407 or higher at $4,480.
Gold Price Technical Analysis (the Daily Chart)
In the daily chart, the price of the yellow metal trades within a descending channel formation. The 14-day RSI also supports a long-term bearish bias as it edges closer to oversold conditions.
Therefore, the bears will look to stretch the current run of declines toward $4,107 or lower to $3,890. On the other hand, the bulls will look to pounce on rebounds at about $4,549 or higher at $4,759.