Gold turns flat near $1292 after dropping below $1285 on strong NFP
- Wall Street posts stays in the green in the first half of the session.
- US Dollar Index clings to gains following the sharp fluctuation after NFP data.
- 10-year US T-bond yield loses traction, remains on track to close week higher.
The XAU/USD pair slumped to a daily low near $1284 after the strong NFP data from the U.S. helped the greenback gather strength. However, the pair didn't have a difficult time following the initial market reaction as the 10-year T-bond yield turned negative on the day to ramp up the demand for the precious metal as a safe haven As of writing, the pair was virtually unchanged on a daily basis at $1292.
According to the U.S. Bureau of Labor Statistics, the unemployment rate in the U.S. remained unchanged at 3.8% in March with the nonfarm payrolls increasing by 196K to beat the market expectation of 180,000. Underlying details of the publication revealed that the annual wage inflation edged down to 3.2% in March from 3.4% in February to trigger a mixed market reaction. Nevertheless, the US Dollar Index remains on track to post weekly gains for the second straight week and was last seen up 0.15% on the day at 97.44.
Meanwhile, major equity indexes in the U.S. started the day in the positive territory but struggled to gather momentum, suggesting that the risk appetite is not controlling the price action ahead of the weekend and allowing gold to stay resilient.
Technical levels to consider
The pair could face the initial resistance at $1300 (psychological level) ahead of $1307 (50-DMA) and $1316 (Mar. 20 high). On the downside, supports are located at $1284 (daily low), $1280 (Mar. 7 low/Apr. 4 low) and $1276 (Jan. 24 low/2019 low).