Gold prices (XAU/USD) remain stagnant at around $1,855 as traders brace for major market releases today (Monday, March 6, 2023). Traders are keeping a keen eye on several headlines including China’s inflation data, Fed Chair Powell’s testimony, and the US NFP.
There is also the US Dollar’s indecisiveness despite a retracement in the Treasury bond yields.
The mixed China headlines
The National Development and Reform Commission of the People’s Republic of China (NDRC) recently said that China’s economy is steadily improving and promised to release the potential for consumption. However, the market sentiment turned distasteful after the National People’s Congress (NPC) annual session appeared to be grim because of its growth target as well as the geopolitical concerns.
Fed Chair Powell’s testimony
Federal Reserve Chair Jerome Powell is expected to follow fellow central bankers in suggesting higher interest rates than policymakers anticipated if economic data continue to come in hot. Fed officials are reportedly considering raising rates to quell the stubborn inflation; something that is making Democratic lawmakers uneasy. Some policymakers are suggesting they may be required to do more so as to tame prices following a series of robust reports on jobs, prices and consumption, which have made traders bet the Fed will hike interest rates beyond the 5.1% level. Atlanta Fed President Raphael Bostic told reporters Thursday:
“I want to be completely clear: There is a case to be made that we need to go higher. Jobs have come in stronger than we expected. Inflation is remaining stubborn at elevated levels. Consumer spending is strong. Labour markets remain quite tight.”
Generally, a hawkish tone from Powel as he testifies before the Senate panel on Tuesday and the House committee on Wednesday will likely spur pushback from progressives who want the Fed not to inflict undue pain on the labour market.
XAU/USD Levels to watch
| LEVELS | |
|---|---|
| Previous Daily High | 1856.35 |
| Previous Daily Low | 1835.46 |
| Previous Weekly High | 1856.35 |
| Previous Weekly Low | 1804.76 |
| Previous Monthly High | 1959.8 |
| Previous Monthly Low | 1804.76 |
| Daily Fibonacci 38.2% | 1848.37 |
| Daily Fibonacci 61.8% | 1843.44 |
| Daily Pivot Point S1 | 1841.68 |
| Daily Pivot Point S2 | 1828.13 |
| Daily Pivot Point S3 | 1820.79 |
| Daily Pivot Point R1 | 1862.57 |
| Daily Pivot Point R2 | 1869.91 |
| Daily Pivot Point R3 | 1883.46 |
Overall, XAU/USD is teasing a bear move amid an inactive day at the start of an all-important week.
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