The gold price (XAU/USD) experiences a second consecutive day of selling pressure, reaching a one-week low around the $2,025 mark during the early European session on Monday. The surge in US Treasury bond yields, driven by Friday’s robust US jobs report, has compelled investors to reassess their expectations regarding the Federal Reserve’s (Fed) potential rate cuts, contributing to the decline in the precious metal.
The blockbuster US jobs report has shifted sentiment, leading to a reduction in expectations for imminent Fed rate cuts. This development has propelled US Treasury bond yields higher, posing a challenge for gold as an asset with no yield.
While the US Dollar (USD) attempts an intraday rebound, it faces resistance near the 100-day Simple Moving Average (SMA). The failure to surpass this level may offer some support to the gold price. Moreover, concerns surrounding escalating geopolitical tensions in the Middle East and uncertainties related to China’s economy are factors that could act as limiting forces against further declines in the safe-haven XAU/USD.
Market focus turns to the upcoming US ISM Services PMI data and speeches by influential Federal Open Market Committee (FOMC) members for potential short-term trading opportunities. The interplay between economic indicators, geopolitical developments, and monetary policy expectations is expected to drive gold price movements in the near term.
