Piece written by Tiaan van Aswegen, Trive Financial Market Analyst 

With the gold spot price on track for its eighth consecutive day of decline, the SPDR Gold Trust (NYSE Arca: GLD) has been under heavy pressure in the opening sessions of the week. An unexpected increase in US labour market data on Tuesday further weighed on the fund, as treasury yields surged to 16-year highs, pulling the greenback with it, as the demand for non-interest bearing securities takes a back seat despite its safe-haven qualities.  

On Tuesday, the US JOLTs Job Openings came in at 9.61M, a significant increase from the prior 8.92M, directly contrasting the consensus for a decline to 8.8M. As a result, the bets for the Federal Reserve to remain hawkish in upcoming meetings were bolstered, sending treasury yields to new heights. Due to the higher risk-free rate available in the market, the demand for non-interest-bearing securities has waned, with the gold spot price recently touching 7-month lows at $1,814 per ounce.  

This trend has been evident over the last six months, as the US 10-year treasury yield has advanced close to 40%, with the 2-year yield following closely with a 28% rise over the same period. During this time of rising yields, the gold spot price has declined close to 8%, weighing on the upside potential of the GLD fund. As we advance, the Non-Farm Payroll data on Friday could be a catalyst for the easing of yields if the report comes in weaker than expected or add to the recent pain for gold if the labour market remains resilient.  

Technische Analyse 

On the daily chart, a descending triangle formed, where the crossing of the 50-SMA (blue line) above the 25-SMA (green line) triggered a breakdown at the triangle support, which resulted in a sustainable run to the downside. However, the RSI indicates oversold conditions, and if volumes start declining, a reversal could be on the cards. 

The first potential resistance to the upside is at $171.35. To initiate a sustainable reversal, the fund may have to clear this level before facing another test at $173.85. The breakdown level of the triangle could then become the focal point at $175.83 before potentially retesting the 61.8% Fibonacci golden ratio at $176.67 from the early May peak. At this level, high volume could be required to move higher, with additional resistance from the 25-SMA threatening the upside potential.  

However, if the market fails to find buyers at the current level, the currently elevated volumes could result in a continuation toward $168.16. Lower support is established at $167.13, where the price could look to pivot and retrace the recent selloff.  

Zusammenfassung 

Stronger-than-expected US labour data has sparked US treasury yields to move higher, adding to the recent woes of the SPDR Gold Trust. With support at $168.16 edging closer, the market could look toward the NFP report to either continue its trend toward $167.13 or initiate a pivot and retracement back to the breakdown level of the triangle around $175.83.  

Quellen: Koyfin, TradingView