Gold Prices Sink, Support Breakdown Heralds More Weakness; XAU/USD Key Levels
Gold Plummets: Is $2,280 Next?
Gold prices dropped significantly, over 2%, hitting a two-week low after strong U.S. economic data pushed Treasury yields and the U.S. dollar higher. This breakdown through key support levels suggests further weakness for gold, influenced by sustained high U.S. interest rates amid persistent inflation.
Technical analysis indicates that if gold's price continues to fall, the next support is at the 50-day moving average of $2,310, with potential further drops to $2,300 and $2,280. Conversely, resistance lies at $2,365 and $2,375, with a breakout potentially leading to a rally towards $2,420 and possibly $2,430.
What specific U.S. economic data released on Thursday contributed to the decline in gold prices?
The specific U.S. economic data released on Thursday that contributed to the decline in gold prices is not explicitly mentioned in the provided text. However, it states that stronger-than-expected U.S. economic data drove U.S. Treasury yields higher and boosted the U.S. dollar against most currencies, resulting in a more than 2% fall in gold prices.
How did the increase in U.S. Treasury yields and the strengthening of the U.S. dollar impact gold prices?
The increase in U.S. Treasury yields and the strengthening of the U.S. dollar had a significant negative impact on gold prices. As U.S. economic data came in stronger than expected, it drove Treasury yields higher and bolstered the U.S. dollar against most currencies. This scenario typically diminishes the appeal of gold, which does not yield interest. Consequently, gold prices fell sharply, dropping over 2% in a volatile trading session and breaking through several key support levels. This decline brought gold to its lowest price point in two weeks, illustrating the direct influence of rising U.S. Treasury yields and a stronger dollar on the precious metal's market value.