Daily Analysis XAUUSD - 3 Aug 2023

The ADP National Employment report on Wednesday showed that private-sector employers in the United States (US) added 324K jobs in July, exceeding the anticipated 189K. This indicates continued labor market resilience, potentially shielding the economy from a recession and supporting the Fed's hawkish stance. The expectations are keeping the US Treasury bond yields elevated, leading to the possibility of a further near-term move up for the USD and suggesting a downside for the gold price. Investors have already digested the Fitch downgrade of the US government's credit rating to AA+ from AAA late Tuesday.

Policymakers' defense of US Treasury bonds and hopes for upbeat US economic growth are influencing gold sellers ahead of mid-tier US data related to employment and activities in July. Key data points include US ISM Services PMI for July and second-quarter readings of Nonfarm Productivity and Unit Labor Costs, which are crucial for determining Friday's US Nonfarm Payrolls (NFP) and US Dollar movements.

Additionally, China's positive Caixin Manufacturing PMI is providing support to the XAU/USD price, requiring strong negatives from Beijing to keep the gold bears hopeful.

Gold continues the selloff and finds support at the 1932 level. The negative correlation with the US10Y is high. For any breakout of the actual support level, we find the 1920 followed by the 1900 support levels.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1940	1932	1920