The price of gold (XAU/USD) has seen a slight increase but remains below its weekly peak in the early European trading hours on Friday. The main factor hindering significant growth is the reduced likelihood of the Federal Reserve implementing aggressive policy easing. Additionally, many traders are cautious, waiting for the US monthly employment report before making any significant moves.
Market Overview: Limited Gains for Gold Ahead of US Jobs Report
The gold price has remained steady despite a slight pullback in the US Dollar from its one-month high reached on Thursday. This USD weakness is driven by traders repositioning themselves ahead of key data. Additionally, persistent geopolitical tensions, particularly in the Middle East, continue to provide some support for gold, known for its safe-haven appeal. These factors suggest that gold’s price could climb further, staying close to its recent all-time high.
Daily Market Movers: Geopolitical Risks and Focus on US NFP
The US labor market has shown strength, with a slight rise in unemployment claims to 225K for the week ending September 28, compared to the 218K the previous week. This follows a stronger-than-expected increase in private-sector employment in September, signaling a still-resilient labor market. The Institute for Supply Management (ISM) also reported that its Non-Manufacturing PMI rose to 54.9 in September, the highest since February 2023, indicating robust economic growth in the third quarter.
These factors have lessened the chances of the Federal Reserve making a large interest rate cut, which has strengthened the US Dollar and, in turn, limited the rise of gold prices. Additionally, rising tensions in the Middle East, particularly between Hezbollah and Israel, have led to further demand for gold as a safe-haven asset.
Upcoming US Nonfarm Payrolls Report: Impact on Gold Prices
All eyes are now on the upcoming US Nonfarm Payrolls (NFP) report, which is expected to show an addition of 140,000 jobs in September, slightly lower than the previous 142,000. The unemployment rate is expected to stay at 4.2%. This report, along with wage data, will play a crucial role in determining future US Federal Reserve rate decisions, influencing USD demand, and providing fresh direction for gold prices.
Technical Outlook: Bullish Consolidation Continues
From a technical perspective, gold prices appear to be in a bullish consolidation phase following their recent rise to record highs. Oscillators on the daily chart remain in positive territory, with some easing from overbought conditions. This suggests the path for gold is still upward, with immediate resistance at $2,672-$2,673, followed by $2,685-$2,686, near last week’s all-time high. A break past $2,700 would signal an extension of the current uptrend.
On the downside, support lies at $2,625-$2,624, which could act as a pivotal point. A break below this level may lead to more aggressive selling, pushing prices towards the $2,600 and eventually to the $2,560 support area. Further decline could bring prices down to $2,535-$2,530, with a possible drop to the psychological $2,500 mark.
Conclusion
The gold market remains poised for potential gains, with geopolitical tensions offering support and the US employment data acting as a key driver for the next major price move. Investors are watching the upcoming US Nonfarm Payrolls report closely, as it will provide important signals on the Federal Reserve’s next policy move and influence both the US Dollar and gold prices. For more gold updates and daily market signals, visit Daily Gold Signal for in-depth analysis. You can also stay updated with the latest gold price movements by visiting the Daily Gold Update.
