Where Did You Gold? – Is There an End In Sight For Gold's Descent? Next Mover: Nonfarm Payrolls, Biden Stimulus Package

XAU/USD has experienced a sharp decline from $1,719.20 to $1,688.20. Although the price appeared to pick up slightly, the bulls were unable to hold down the fort and the downward fall continued. Currently, the price stands at $1,687.30 and trading below its 50-day Simple Moving Average (SMA).

Unsurprising, the Relative Strength Index is close to an oversold condition, and presently lies at 38, while the Moving Average Convergence Divergence (MACD) is also indicating the bearish trend.

Analyst Anil Panchal from FX Street believes that the outcome of the tense battle between the bulls and the bears lies in the successful conquering of key resistance level of $1,765 (November 2020 low) by the bulls, while the bears must overcome the falling trend line from August (around $1,680).

At present, the price of spot gold is $1,696.94. 

Source: Yahoo Finance

Meanwhile, Jerome Powell has spoken, and the markets are reeling. The chairman of the U.S. Federal Reserve (Fed) reassured the market to maintain the loose monetary policy and once again downplayed the hike in U.S. Treasury yields. Unsurprisingly, this caused a spike in yields. The Wall Street Journal reported that the 10-year U.S. Treasury yields moved above 1.55%, following Powell’s speech. In line with the anticipation of further economic recovery, data from the labour market remain in the spotlight. Powell had stated that “it will take some time to get back to maximum employment.”

This week’s ADP Employment Change report came in at 117,000 against a forecast of 177,000. While the recent initial jobless claims came in at 745,000 against the expected 750,000. Markets would be picking up clues from the release of the nonfarm payroll later today.

Meanwhile, another important item in the docket remains the Biden Stimulus Package. President Biden has conceded to reduce the eligibility criteria of the stimulus cheques to exclude those earning more than $80,000 annually and families that earn more than $160,000 a year. The clock is ticking loudly for the Democrats to get the bill for President Biden’s sign-off into law, especially as the unemployment benefits are due to expire on March 14.

What an eventful week it has been for gold! Will the gold bulls push back and fight, or will they concede defeat to the bears? Let’s see how the week will end in the yellow metal space.

XAU/USD (as of Mar 5, 2021, 10.20 a.m., GMT +8) - $1,687.30

FOLLOWME XAU/USD User Sentiment (as of Mar 5, 2021 at 11 a.m.)

Short – 46.51%

Long – 53.49%