Gold Price Forecast: XAU/USD holds above $1,920, eyes on Chinese data
- Gold price holds recent gains above $1,920 in the early Asian session.
- The US Treasury bond yield sell-off acts as a headwind for the US Dollar, benefitting the US Dollar-denominated Gold price.
- All eyes are on the Chinese Consumer Price Index (CPI) and Producer Price Index (PPI) later in the Asian session.
Gold price gains some traction and holds above $1,920 during an early Asian session on Monday. The weaker-than-expected US jobs data on Friday dragged the US dollar sharply lower across the board and benefited the Gold price.
The US economy added jobs at a slower-than-anticipated pace in June, as the Labor Department reported on Friday that Nonfarm Payrolls (NFP) rose by 209,000 last month, declining from a revised 306,000 in May. The market consensus expected the figure to increase by 225,000.
Meanwhile, the Unemployment Rate decreased from 3.7% to 3.6% in June and Average Hourly Earnings remained unchanged at 0.4%, above the market expectation of 0.3%.
Following the US labor data, the US 10-year Treasury bond yields fell to 4.023%. The US Dollar Index (DXY), a gauge of the dollar’s value against a basket of six currencies, slumped to 102.22 the lowest level since June 23. The US Treasury bond yield sell-off acted as a headwind for the US Dollar, benefiting the US Dollar-denominated Gold price.
Moving on, market players will now look for fresh cues from the Chinese CPI and Producer Price Index (PPI) data, which will feature later in the Asian session. Investors would then shift their focus toward the US Consumer Price Index (CPI), the Producer Price Index (PPI) and the US University of Michigan Preliminary Consumer Sentiment (July) later in the week. These data will determine the Gold price direction in the near term. The robust data could send US yields higher and weigh on Gold price. On the other hand, weak data could be positive for the precious metal.
Gold price technical levels
From the technical perspective, Gold price stands at the upper band of a descending trend channel on a four-hour chart. The initial resistance level is seen at $1,935 (High of July 7), while $1,915 acts as an immediate support level for the time being.