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Gold prices saw a slight dip, losing 0.2% to trade in the $2,640 range on Tuesday. This decline followed the release of robust US labor market data, which highlighted the economy’s resilience. The US Dollar (USD), widely used in global gold trading, strengthened after the announcement, pressuring gold prices.
Impact of US JOLTS Job Openings Data on Gold Prices
The US Bureau of Labor Statistics reported a rise in JOLTS Job Openings to 7.744 million in October, exceeding expectations of 7.480 million. This figure also outpaced September’s revised 7.372 million. The data revealed the strength of the US labor market, reinforcing the notion of a solid economic foundation.
These results caused gold to erase earlier gains spurred by Federal Reserve (Fed) commentary, which hinted at potential interest rate cuts in December. Lower interest rates tend to favor gold by reducing the opportunity cost of holding this non-yielding asset.
Gold Prices Gain Amid Geopolitical Uncertainty
Despite recent pressure, geopolitical uncertainties provided some support for gold prices. Conflicts in the Middle East, coupled with the Russia-Ukraine war and political tensions in France, have kept demand for gold steady. During global crises, investors frequently seek gold as a reliable safe-haven asset.
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Fed Signals and Gold Movement
On Tuesday, gold prices edged up slightly after several Federal Reserve officials hinted at a possible interest rate cut. Fed Governor Christopher Waller and other officials expressed varying degrees of support for a December rate reduction, citing balanced risks to inflation and employment.
The CME FedWatch tool now places the likelihood of a 25-basis-point rate cut in December at 72.5%. Such a move could buoy gold prices, as reduced rates lower the appeal of interest-bearing investments compared to gold.
Technical Analysis: Bearish Signals Persist
Gold’s recent movement reflects a potential three-wave Measured Move pattern, signaling bearish sentiment. A break below $2,605 could confirm further downside, with prices potentially targeting $2,550.
The Moving Average Convergence Divergence (MACD) indicator shows bearish trends, having crossed below its signal line and entered negative territory. These technical signals hint at a challenging near-term outlook for gold prices.
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