Gold Price Outlook: XAU/USD Could Hit Sub-1700 Levels on Positive US Data

Summary:

Gold price (XAU/USD) may be forced below the $1700 mark is the slew of US data releases this week remain positive for the greenback.

Spot gold prices (XAU/USD) continue to drop after US 10-year bond yields began to recover from recent declines. New multi-month lows were seen in Tuesday’s Asian session, with the XAU/USD hitting an intraday low of 1706.97.

The key to gold price action for the week could lie with the key US data releases for the week, including the Non-Farm Payrolls report due on March 5. Monday’s ISM Manufacturing PMI report was good for the greenback and helped spur Monday’s lower finish. The ISM Services PMI report for February and ADP Employment Change are other data lined up for the week.

Bond markets will continue to be a driver of gold price action as well.

Technical Levels to Watch

The breakdown of the triangle on the daily chart has set up the move below $1800, which bounced off the 1719.13 support line this Tuesday. The bounce now targets the 1741.01 resistance, with the potential to extend north towards 1763.30. Additional targets to the north include 1789.49 and 1815.20.

On the flip side, a breakdown of the 1719.13 support could stem from a rejection and pullback move at 1741.01. This breakdown opens the door towards 1699.43, with further potential to slide to other targets at 1638.39 (7 April 2020 low) and 1600.00 (8 January 2020 high).