A stronger dollar makes XAUUSD less attractive!
While gold is caught in the trap of sellers, it is weaker against the US dollar. Spot gold lost 1.6% to $1,735 per ounce against the US dollar to test its lowest price since mid-December.
While the focus is on the minutes of the US Federal Reserve's last monetary policy meeting that should release later today, May JOLTs reports also confirm that the US labor market is cooling after a few months of increasing. According to the report, Job openings fell by 427K in May, while layoffs picked up, and the number of workers quitting their job also fell for the second month in a row. More than everything, these reports show that the balance between the openings, quits, and employed is gone, and the labor market is falling apart.
Numbers in more detail show that while openings at 11.3 million are much more than expectations, however 427K drop from the earlier month was the most significant monthly decline since late 2019 if we take the lockdowns in the spring of 2020 out of our statistics. Numbers show that while the job market is still tight, employers are getting less sure about economic outlooks.
On the stock markets, while focus turns on the Earnings reporting season, with more than 80% pricing in another 75 bps rate hike in the 27-28 July FOMC meeting, prices are under pressure. These numbers and reactions in the economic calendar and charts tell us that gold free-fall is not fundamentally expected and is somehow caught in the trap of technical sellers. With doubts in the stock markets and global economic growth, gold's safe haven should be more interested, at least apart from USD and against other currencies except for the US dollar, which is testing its highest value since 2002.
From the technical point of view, XAUUSD breached its crucial support at $1786 with solid market volume, which shows most probably sell orders have been active. Usually, in this type of situation, the asset is supposed to get back to its key support (Which is $1786 now for gold), and then, based on the market conditions, the next moves will be precise.
