Gold, Bond Yield, US Dollar Technical Analysis: Gold Eyes Record Levels

The initial jobless claims in the US rose by 6,000 from the previous week to 223,000. This unexpected increase highlights the growing strain on the US labor market under the Federal Reserve’s restrictive interest rate policies. However, this strain is due to the weather distortion and the fire in Los Angeles, which will likely be reflected in the next releases.

The data indicates that more individuals struggle to find employment, signaling potential economic headwinds. These labor market pressures enhance gold’s appeal as a safe-haven asset amid rising concerns about the broader impact of monetary tightening. The weaker-than-expected job market data could also fuel speculation about its influence on upcoming Federal Reserve policy decisions.

However, the Flash Manufacturing and Services PMI data will provide further direction for the US dollar on Friday. Gold (XAU) remains strong, and after a short pullback on Thursday, the price is poised to rise on Friday, targeting a record level of around $2,790.

Gold (XAU) Technical Analysis

Gold Daily Chart – Ascending Broadening Wedge

The daily chart for gold shows that the price consolidates around the $2,760 level to stabilize gains. This price stabilization opens the door for further upside momentum toward the record level of $2,790. The price correction is expected to strengthen the price structure for the gold market. The 50-day, 100-day, and 200-day SMAs indicate an ongoing upward trend. However, a break below $2,650 could signal a deeper correction.

Gold 4-Hour Chart – Ascending Channel

The 4-hour chart for gold shows that the price has formed an ascending channel starting from the December 2024 lows. The breakout above $2,720 has triggered positive momentum, and the current correction will likely present traders with a buying opportunity.

Treasury Yields (TNX) Technical Analysis

10-Year Treasury Note Yield Daily Chart – Inverted Head and Shoulders

The daily chart for the US 10-year Treasury yield shows that yields have started consolidating between 4.62% and 4.70% at the strong resistance zone. The breakout from the one-year trendline has activated an upward trend, with yields expected to rise further. A break above the 4.70% level could push the 10-year Treasury yield toward 5%, which is considered a strong resistance level and the short-term target.

10-Year Treasury Note Yield 4-Hour Chart – Ascending Channel Pattern

The 4-hour chart for the 10-year Treasury yield shows that yields have been trading within an ascending channel. The recent correction from the technical resistance at 4.80% was driven by uncertainty about Trump’s trade policies. However, the overall direction remains upward. If the 10-year Treasury yield breaks above 4.70%, it will likely move toward the 5% level. However, a correction towards 4.40% is possible before the next move higher.

US Dollar (DXY) Technical Analysis

UD Dollar Daily – Consolidation and Correction

The daily chart for the US Dollar Index shows that it reached the red circle around the 107 zone on Thursday, forming a bullish hammer. However, this bullish hammer did not lead to a strong reversal, as the US Dollar Index remains weak. The 107 to 108 zone is the first support level during this price correction. A break below 107 could pave the way for a move toward 105.60. The price action suggests consolidation in the short term while the overall upward trend remains intact.

US Dollar 4-Hour Chart – Ascending Broadening Wedge

The 4-hour chart for the US Dollar Index shows that it has formed an ascending, broadening wedge pattern and rebounded from the support level at 107.80 within this wedge. However, the short-term direction remains uncertain, as the index remains vulnerable to potential impacts from Trump’s new policies and implementation.