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Gold Prices Drop as U.S. Dollar Strengthens Amidst Cautious Market Sentiment

By Alex BoltyanCommoditiesMay 11, 2023 01:42PM ET
www.investing.com/analysis/gold-prices-drop-as-us-dollar-strengthens-amidst-cautious-market-sentiment-200638021
Gold Prices Drop as U.S. Dollar Strengthens Amidst Cautious Market Sentiment
By Alex Boltyan   |  May 11, 2023 01:42PM ET
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The US dollar gathered pace on Thursday, weighing on gold prices, with the bright metal failing to capitalize fragile market mood following a negative Wall Street opening. On Wednesday, softer-than-expected US inflation data lifted expectations that the Federal Reserve will be pausing its tightening cycle next meeting, putting the dollar under interim pressure.   
  
At the time of writing, spot gold XAU/USD is trading at the $2,015/oz area, 0.7% below its opening price and posting the second daily decline in a row.   
  
Cautious market mood boosted the greenback amid banking sectors jitters and US debt ceiling concerns. Wall Street main indexes traded mixed, with the S&P 500 and de Dow Jones down, while the Nasdaq remains slightly up on the session.   
  
The dollar rallied versus most competitors despite the decline in US bond yields. The US 10-year Treasury note yields 3.382%, with the rate down for a second consecutive day amid higher bond demand.  
  
Despite the risk-off mood and lower bond yields, the yellow metal continues to struggle finding buyers, with the price pulling back from record highs and approaching the $2,000 level.  
  

   

XAUUSD Daily Chart
XAUUSD Daily Chart


From a technical perspective, XAU/USD short-term perspective has turned slightly bearish according to indicators on the daily chart, although the price is resisting above the 20-day SMA, which stands as immediate support at $2,007.  
  
Loss of the moving average will expose the $2,000 psychological area, targeting the critical $1,975 region. On the other hand, recovery of the $2,050 zone would improve the short-term outlook, putting focus back on the record highs at the $2,070-75 zone.

Gold Prices Drop as U.S. Dollar Strengthens Amidst Cautious Market Sentiment
 

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Gold Prices Drop as U.S. Dollar Strengthens Amidst Cautious Market Sentiment

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Comments (2)
Theng Putikpenhponluer
Theng Putikpenhponluer May 11, 2023 6:59PM ET
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Gold price will bearish or not ?
Naga head hunter
Naga head hunter May 11, 2023 5:59PM ET
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gold price down or up today?
Pradeep Rastogi
Pradeep Rastogi May 11, 2023 5:59PM ET
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