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Author: Sir Amar – Technical Analyst

Gold (XAU/USD) remains on the defensive, reversing the previous day’s rebound from the week’s low as traders await further clues during Thursday’s Asian session. However, at the time of writing, the yellow metal was reviving its intraday low of around $1835. A preliminary look at the state of the US jobs market from payroll provider UKG in June suggests some strengthening, even as the Federal Reserve hikes interest rates sharply and economists are sounding the alarm about the likelihood of a recession. The news seems to have put further pressure on gold prices.

However, the precious metal’s recent losses could also be related to Wednesday’s reassessment of Fed Chair Jerome Powell’s semi-annual monetary policy report. Fed Chair Jerome Powell’s justification for the latest rate hike, the largest since 1994, found acceptance at least in the first round of the Biennial Monetary Policy Report Testimony. However, Powell’s denial of the need for a sharp rate hike in appeared to have boosted risk appetite and gold prices thereafter ahead of recent weakness.

Gold extends pullback from 8-day resistance as sellers attack. With the RSI pulling back from the overbought territory supporting the metal’s recent weakness, XAU/USD rates could drop below the HMA’s immediate confluence around $1835. Data from retail traders shows that 81.63% of traders are net-long, with a long to short trader ratio of 4.44 to 1. The number of net traders is down 0.54% from yesterday and 7.48% lower than last week while the number of net short traders is 1.49% higher than yesterday and 33.15% higher than last week.