Gold (XAU/USD) trades right above the $4,000 psychology¡gicval level at the time of writing, after hitting fresh year-to-date (YTD) lows at $3,941 earlier on the day.
The precious metal has turned positive on the daily chart, but rallies remain subdued as rising hopes of Federal Reserve (Fed) tightening keep buoying the USD ahead of a string of US employment indicators
Later on Tuesday, the US JOLTS Job Openings report is expected to show solid job creation in May. The highlight of the week, however, is Thursday’s Nonfarm Payrolls report. which is forecast to show a 110K increase in net employment, after 172K in May, confirming that the US economy keeps creating jobs at a healthy pace. These figures are likely to strengthen the case of a Federal Reserve (Fed) rate hike in the coming months.
The CME FedWatch Tool shows a 31% chance of a quarter-point hike in September and more than 60% in October, up from 6% and 20%, respectively, one month ago. The risk is skewed to the downside for precious metals. Technical Analysis: Momentum Indicators show bullish divergence XAU/USD trades at $4,032, keeping a bearish near-term bias and on track to a more than 11% decline in June, with no sign of a bullish reversal except for the bullish divergence in the Relative Strength Index (14).