The Gold Spot Price (XAUUSD) fell from its peak as recessionary fears played on the market in waves. The last Non-Farm Payrolls report came in well-above expectations to renew expectations of a rate hike, sending the Gold spot price lower. The U.S. economy has since shown signs of weakness, and traders have been turning risk-on of late.

The XAUUSD’s price action has been somewhat uneventful this week as the market anticipates speeches from central figures in the Federal Reserve. In addition, the U.S. economic calendar is busy with retail sales, industrial production, labour market and home sales reports all lined up to provide insight into the current state of the world’s largest economy.

Technical

The XAUUSD sharply rejected its resistance level at 2077.80, leading to bearish traders running riot. However, the yellow metal’s uptrend remains intact as the price found support and trades above the 100-day moving average, while support established at the 1980.70 level is untested.

With the spot price now consolidating on low volumes around the 61.80% Fibonacci Retracement Golden Ratio level, bulls and bears probably await economic data before committing to a move. Bullish traders will likely earmark the 2077.80 level as a point of interest if the U.S. economy potentially points to a stronger-than-expected slowdown, thereby growing appetite for safe-haven instruments.

Alternatively, the 1980.70 level could come into play if economic data points to further rate hikes to come, further bolstering the Greenback at the expense of the yellow metal.

Summary

The 1980.70 and 2077.80 levels will likely be the most observed as traders gauge whether a recession is oncoming or if further rate hikes are likely. Therefore, the upcoming events on the U.S. economic calendar will have a considerable bearing on the market and the potential direction for the Gold Spot Price.

Sources: Reuters, TradingView