Update: Asia’s gold price, XAU/USD, remains subdued as the opening session progresses while the US Dollar remains in bullish hands while trading above 98.50, according to the DXY index. Gold is trading at $1,925 and is unchanged so far after starting lower at $1,921.48.

The dollar got off to a strong start to the week after last Friday’s mixed nonfarm payrolls data and as Treasury yields rose on expectations of a hawkish Federal Reserve and further US interest rate hikes. Additionally, there has been talk of Russian gas bans that have kept the euro in sight of its 2022 lows.

According to Reuters, “Germany’s defense minister said on Sunday that the European Union should discuss banning Russian gas imports, which could further dampen growth and the currency after Ukrainian and European officials accused Russian forces of atrocities”.

End of update

At $1,924.27, the opening low, the price of gold starts on the back foot on Monday at the Asian open. The yellow metal ended Friday down around 0.62% at $1,925 after falling from a high of $1,939.62 to a low of $1,918.10.

Investors must weigh the risks of a protracted war in Ukraine and as peace talks drag on in vain as well as a US recession amid a hawkish backdrop at the Federal Reserve. Analysts at TD Securities explained that gold remains in the crosshairs as Fed prices provide a constant dark cloud in the precious metals market. ”

“While safe-haven appetite and massive ETF inflows provide strong offset, keeping prices above CTA liquidation thresholds near $1830/oz, the drag of a hawkish backdrop of the Fed is weighing more and more on the bullish momentum of the yellow metal.”

On Friday, nonfarm payrolls in the United States were solid for March. 431,000 jobs were added last month, below estimates of 490,000, although data on job increases in February was revised upwards. However, the unemployment rate fell to 3.6%, the lowest since February 2020. This supported the US Dollar. As measured by the DXY Index, the greenback was higher for the second day in a row after two consecutive days of declines and is once again trading near 98.50. This month’s cycle high near 99.418 should eventually be tested. The US Dollar is offered in the open on Monday, now trading in the 98.60s.

Additionally, Reuters reported that futures tied to the Fed’s key rate fell after the jobs report, underscoring expectations that the Fed will hike by half a percentage point in each of its next three months. meetings to deal a more decisive blow to price pressures. “This would follow a quarter-point hike on March 16, when the Fed embarked on a new tightening cycle.”

Nonetheless, despite the greenback’s strength, analysts at TD Securities argued that “as long as material progress on ceasefire talks and de-escalation remains elusive, safe-haven flows are likely to keep the yellow metal going.” supported”.

According to speculation of a US recession, analysts said, meanwhile, “the 2y-10y curve flirting with inversion has further fueled talk of recession on the horizon, providing another positive momentum for the gold market”. That said, while geopolitical tensions and signals of yield curve recession are reigniting investor interest in gold, downside risks are more prevalent amid hawkish Fed sentiment and as dealmakers continue to work. towards a ceasefire.

gold, technical analysis

According to the pre-opening analysis, Gold chart of the week: XAU/USD is under pressure for the open

…the M formation is a bullish reversal pattern and price should be drawn towards the neckline between $1,980 and $2,000. However, the sideways consolidation has unfolded to the point that there appears to be a near-term downside bias where gold is currently resisted by a 61.8% Fibo.