• Gold price falls 0.28% in response to Powell’s comments at ECB forum.
• Powell is cautiously sanguine about disinflation and stresses the need for more progress before cutting interest rates.
• US Treasury yields remain stable while the US dollar trades within a familiar range.
• Strong US job market data: Job openings exceeded expectations, indicating the economy is resilient.

Gold prices fell during the North American session as market participants digested comments from Federal Reserve (Fed) Chairman Jerome Powell at the European Central Bank (ECB) in Portugal. Powell turned slightly dovish, but US Treasury yields remained mighty. The greenback fluctuated but remained within familiar levels. XAU/USD is trading at $2,324, down 0.28%.

Powell commented that the disinflation process had resumed, but said he would like to see further progress before cutting interest rates. He added: “Because the U.S. economy is strong and the labor market is strong, we can take our time and get this right.”

He acknowledged that the risks associated with the Fed’s dual mandate have become more balanced, noting that “we need to manage them.”

US employment data revealed that the number of job vacancies surprisingly rose above estimates, showing the stability of the labour market in the face of high interest rates at 5.25%-5.50% set by the Fed.

Further data is expected on Wednesday, led by the publication of the minutes of the last Federal Open Market Committee (FOMC) meeting and PMI indices for the services sector prepared by S&P Global and the Institute for Supply Management (ISM).

Data will resume on Friday, as U.S. markets will be closed on Thursday for Independence Day. Until Friday, traders will be focused on the Nonfarm Payrolls (NFP) report for June.

Daily Market Update: Gold Falls Below $2,330 Amid Strong JOLTS Data

• The U.S. Bureau of Labor Statistics released a report on job openings and labor turnover in May, which showed 8.14 million vacancies, which is higher than forecasts and the April result of 7.919 million, the lowest in three years.
• US business activity in the manufacturing sector showed mixed results. Traders now focus on the upcoming release of services sector data on Wednesday.
• The probability of the Federal Reserve cutting interest rates by 25 basis points in September is 63%, up from 58% on Monday, according to the CME FedWatch Tool.
• The December 2024 federal funds rate futures contract implies the Fed will ease monetary policy by just 36 basis points (bps) by the end of the year.

Technical Analysis: Gold Price Fluctuates Around Head and Shoulders Neck Line

Gold is bullish but is consolidating near the head and shoulders neckline at $2,320-$2,350. Despite the bearish chart pattern, momentum has turned neutral, with the Relative Strength Index (RSI) approaching its neutral 50 line. This indicates a stalemate between buyers and sellers.

To sustain the bearish continuation, sellers need to push prices below $2,300. If successful, the next demand zone will be the May 3 low of $2,277, followed by the March 21 high of $2,222. Further declines will target the head and shoulders formation between $2,170 and $2,160.

Conversely, if buyers break through the $2,350 level, they will target key resistance levels such as the June 7 cycle high at $2,387, and ultimately target the $2,400 level.