Gold refreshes session lows, slides below $1765 level post-NFP

Gold remained depressed through the early North American session and refreshed daily lows, around the $1763 region following the release of US monthly  |  02/07/2020 12:40
  • Gold added to the overnight losses and remained on the defensive for the second straight session.
  • The risk-on mood seemed to be the only factor exerting pressure on the safe-haven commodity.
  • Upbeat US monthly employment details added to the positive news about a coronavirus vaccine.
  • The offered tone surrounding the USD might help limit deeper losses, at least for the time being.

Gold remained depressed through the early North American session and refreshed daily lows, around the $1763 region following the release of US monthly jobs report.

The headline NFP print showed that the US economy created 4.8 million jobs in June as compared to consensus estimates pointing to gains of 3 million. Adding to this, the previous month's reading was also revised higher to +2.699 million as against 2.509 million reported earlier. Meanwhile, the unemployment rate fell more than expected to 11.1% from 13.3% previous and offered further evidence that the worse of the coronavirus pandemic was behind us.

Optimism over the positive results from yet another potential COVID-19 vaccine and remained supportive of the upbeat market mood. This, in turn, undermined demand for traditional safe havens and exerted some pressure on the precious metal, which now seems poised to extend the previous day's retracement slide from multi-year tops.

Apart from the risk-on mood, a strong intraday pickup in the US Treasury bond yields further collaborated towards driving flows away from the non-yielding yellow metal. Meanwhile, the prevalent selling bias surrounding the US dollar might turn out to be the only factor lending some support to the dollar-denominated commodity and help limit deeper losses, at least for now.

Technical levels to watch

 

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