Gold prices (XAU/USD) dropped slightly on Thursday, trading around $2,640 per ounce. This comes after hitting a high of $2,685 last week. Currently, sellers have the upper hand as expectations for aggressive interest rate cuts by the Federal Reserve (Fed) in the US are fading. Without major rate cuts, gold, which doesn’t offer interest, becomes less appealing to investors.
However, two factors are still supporting gold. First, many investors are buying gold as a safe-haven asset due to concerns about the conflict in the Middle East. Second, despite the Fed’s caution, global interest rates are still trending lower, keeping gold attractive to some buyers.
Fed Uncertainty Slows Gold Prices Amid Interest Rate Changes
Gold’s recent gains are limited by mixed signals about the future of US interest rates. Last week, there was a 60% chance that the Fed would cut rates by 0.50% in November. Now, that chance has dropped to around 35%. This shift followed stronger-than-expected job data in the US, suggesting the economy may not be slowing down as much as thought.
Because of this, the US Dollar has bounced back after its drop in August, which puts extra pressure on gold prices since gold is priced in USD. All eyes are now on the upcoming Nonfarm Payrolls (NFP) report, which will provide more insight into the US job market and could heavily influence gold’s next move.
Technical Analysis: Gold Moves Sideways
In technical terms, gold is trading in a sideways pattern on the 4-hour chart. It’s moving between the all-time high of $2,685 and a lower boundary of $2,625. This suggests a lack of clear direction. To confirm a new trend, gold would need to break above this range’s top or fall below its bottom.
If prices climb above $2,673, we could see a continuation of the previous uptrend, possibly reaching the $2,700 mark. On the downside, gold is testing the 50-period Simple Moving Average (SMA), which could signal mounting downward pressure.
Should gold break through the SMA, it might drop to $2,630 or even lower, to $2,600.
Long-Term Gold Outlook
Even though gold is currently in a consolidation phase, its long-term trend remains upward. According to technical analysis, “the trend is your friend,” so once this pause ends, we could see gold prices continue to rise. Investors may need to stay patient, but gold’s role as a safe-haven asset still supports its long-term appeal.
Conclusion
Gold is stuck in a tight range, influenced by interest rate changes in the US and ongoing global uncertainty. For more regular updates on gold prices and trends, visit Daily Gold Signal. You can also check out this daily gold update for additional insights into the market.
