The price of gold (XAU/USD) has edged upward, regaining some lost ground ahead of crucial US Nonfarm Payroll (NFP) data. With global tensions rising and uncertainties surrounding the US presidential race, demand for gold remains high as investors seek safe-haven assets.
Key Drivers of Gold Price Fluctuation
Gold prices have been influenced by multiple market factors, including rising US Treasury bond yields and a stronger US Dollar. While these pressures might limit gold’s upward momentum, gold still finds support due to its status as a traditional safe haven. Investors are closely monitoring Friday’s US employment report, especially the NFP, Unemployment Rate, and Average Hourly Earnings. Strong employment data could prompt expectations of less aggressive Federal Reserve policy easing, potentially dampening demand for gold.
Gold’s Market Sentiment Ahead of US NFP Release
Analysts suggest that gold’s upward trend could hold if US election risks continue to cloud market sentiment and the Federal Reserve maintains its stance on rate cuts. “Gold is likely to maintain its upward trend and could approach the $2,800 mark in the coming days,” stated Han Tan, Chief Market Analyst at Exinity Group. This prediction underscores gold’s resilient appeal amid global uncertainties.
Geopolitical Tensions and Safe-Haven Demand
Ongoing conflicts in the Middle East have also bolstered gold’s position. Recent reports indicate heightened tensions, with Hezbollah rocket attacks resulting in fatalities in northern Israel, according to the BBC. Such developments fuel demand for assets like gold as investors look to mitigate geopolitical risks.
Investor Sentiment and Market Predictions
Investor sentiment shows that buying on dips remains popular, with analysts suggesting that this trend may persist through the US election period and potentially beyond, given the high levels of market volatility. “Investors are still in the mindset of buying the dips, especially in the lead-up to the election,” noted Edward Meir, a senior analyst at Marex.
Impact of Recent US Economic Data on Gold Price
Recent economic data also plays a critical role in gold’s performance. For instance, September’s US Personal Consumption Expenditures (PCE) Price Index grew 2.1% year-over-year, aligning with market predictions. The core PCE, excluding food and energy, increased by 2.7%, highlighting inflation pressures. Such inflation signals can support gold prices, as precious metals are often considered a hedge against inflation.
Technical Analysis and Future Gold Price Projections
Gold’s daily chart indicates strong bullish momentum, with the metal holding above the 100-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) is around 62.30, suggesting potential gains in the near term. The $2,790–$2,800 zone presents significant resistance, and a breakthrough above this level could signal a rally toward $2,850. Conversely, the initial support level is at $2,715, with additional support at $2,624 and a key psychological level at $2,500.
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