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Gold prices slumped sharply on Tuesday following a strong US jobs report and newswires revealing that Hezbollah supported calls for a truce in the conflict between them and Israel. Hence, hints of a possible de-escalation of the Middle East conflict opened the door for traders to book profits. The XAU/USD trades at $2,615, down more than 1%.US equities remain underpinned by an improvement in market mood. Bullion remained near year-to-date (YTD) highs due to fears of further escalation of the Middle East hostilities. However, signs of a possible solution to the conflict would trigger outflows from safe-haven assets to riskier ones. According to CNN, “Hezbollah supports efforts aimed at achieving a ceasefire in Lebanon, its top official said on Tuesday.”This sponsored a sell-off in XAU/USD, which tumbled over $35 to a daily low of $2,604 before buyers lifted prices to current spot prices. Additionally, the jump in US Treasury yields weighed on the non-yielding metal. The US 10-year benchmark note rate remains unchanged above 4%, yet it’s up over six basis points this week after last Friday’s September Nonfarm Payrolls (NFP) report.Given the backdrop, interest rate traders adjusted their expectations about the Federal Reserve’s (Fed) next move. Most Fed speakers crossing the wires adopted a gradual tone regarding easing monetary policy. However, some, like St. Louis Fed President Alberto Musalem, projected only one additional cut toward the end of the year after backing September’s 50 bps cut.In the meantime, the Greenback clings to minimal gains as next week the US docket will feature the release of inflation data, the Fed’s last Meeting Minutes, Initial Jobless Claims, and the University of Michigan Consumer Sentiment.
Daily digest market movers: Gold price plunges on hopes of truce in Middle East
XAU/USD technical analysis: Gold price slips as sellers eye support underneath $2,650
Gold prices dropped below $2,650 on Tuesday, which could open the door for a deeper pullback. After briefly testing the $2,605 area, it has recovered some ground. But so far, it has failed to gain traction to aim higher and surpass the $2,650 mark.Momentum shows that bears are stepping up as the Relative Strength Index (RSI), despite being bullish, is aggressively aiming lower.Once XAU/USD dropped below the September 30 low of $2,624, it sponsored a leg toward the $2,600 mark. On further weakness, the following floor will be the 50-day Simple Moving Average (SMA) at $2,534.Conversely, if Gold prints a daily close above $2,650, the XAU/USD needs to clear $2,670 to challenge the YTD high of $2,685. Up next will be the $2,700 mark.More By This Author:Gold Struggles As US Yields Rise, Big Rate Cut Hopes Wane Aussie Dollar Slips On Robust US Data, Eyes On Next Week’s US Inflation Silver Price Forecast: XAG/USD Rebounds And Reclaims $31.50
