XAU/USD slides below $1930, erasing its earlier gains ahead of FOMC’s decision – Crypto News – Crypto News
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XAU/USD extended losses beyond $1750 as Jackson Hole looms XAU/USD extended losses beyond $1750 as Jackson Hole looms

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XAU/USD slides below $1930, erasing its earlier gains ahead of FOMC’s decision – Crypto News

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  • Gold price shifted negatively as time for the US Federal Reserve decision approaches.
  • ADP Employment Change was lower than estimates; would it be a prelude for Friday’s NFP?
  • US factory activity in the United States remains in contractionary territory.

Gold price retraces from the day’s high and failed to hold to earlier gains after a busy US economic calendar released its first tranche of data, which was worse than estimated. In addition, a soft US Dollar (USD), capped the XAU/USD’s fall, while US Treasury bond yields continued to push downwards. At the time of writing, the XAU/USD exchanges hands at around $1925.

US economic data was mixed ahead of the FOMC’s meeting

Wall Street remains depressed ahead of the Fed’s monetary policy decision. US economic data showed that the labor market continues to ease as the ADP National Employment Change, which reports private hiring revealed that companies hired 106K employees, well below the 178K foreseen. Later, the JOLT’s Job Openings report showed that vacancies rose to 11.01M exceeding estimates of 10.25M.

In addition, factory activity was updated by two firms, showing that manufacturing activity remains in contractionary territory. The S&P Global Manufacturing PMI for January jumped by 49.9 above the 46.8 estimates, better than expected but in recessionary territory. Elsewhere, the ISM Manufacturing PMI for January plunged to 47.4, below December’s 48.4, and dropped for a third straight month pushing the index to its lowest level since May 2020.

Aside from this, Golden traders remained laser-focused on the US Federal Reserve decision. Traders expect a 25 bps rate hike and further guidance from the US central bank. At around 13:30 GMT, the Fed Chair Jerome Powell would hit the podium, and each word would be scrutinized as investors expect a Fed pivot, from hiking ratesto cut them by the second half of 2023.

gold technical analysis

In the last five trading days, XAU/USD has failed to crack the $1950 psychological barrier, reaching a YTD high of 1949.16. on January 26. Since then, the XAU/USD dropped towards the 20-day Exponential Moving Average (EMA) at $1902.38 and gained traction towards the $1930 area, unable to re-test the YTD highs. That could be attributed to traders booking profits or awaiting Powell and Co.’s decision.

Gold’s key resistance levels lie at the current week’s high of $1934..47, followed by the YTD high at $1949.16, and then the $2000 mark. On the other hand, XAU/USD’s demand areas would be the 20-day EMA at $1904.83, followed by the January 18 swing low of $1896.74.

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