Gold Price Analysis: XAU/USD retreats further to $1670, lowest in five weeks

New York (june 5)  Gold prices are falling sharply on Friday on the back of the US employment report that boosted equity markets and sent US yields to the upside. XAU/USD is losing more than $40 on Friday and recently bottomed at $1670/oz, the lowest intraday level since May 1.

As of writing, XAU/USD trades at $1677, off lows but still under pressure and having the worst weekly performance since March. The key driver to the downside has been the improvement in market sentiment.

On Friday, the US employment data came in much better than expected, triggering more gains in Wall Street, and weighed on the demand for safe-haven assets. Non-farm payrolls, expected to decline by 8 million shocked with a 2.5 million increase in May.

Technical show the decline could continue

Technical readings in the daily chart suggest that the decline may continue according to Valeria Bednarik, Chief Analysts at FXStreet. “The metal collapsed after completing a pullback to a broken 20 DMA. Technical indicators head firmly south within negative levels, and at their lowest since mid-March.”

Bednarik notes that a relevant low stands around the 1670 area and warns that below the next support comes at April 21st low at 1,658.78.

FXstreet