Gold price remains flat within a narrow trading range as traders await the release of the US Nonfarm Payrolls (NFP) report for a fresh catalyst to drive the next directional move. The NFP report is expected to influence expectations about the Federal Reserve’s rate-cutting cycle, which in turn will impact the demand for the US Dollar and provide impetus to the non-yielding yellow metal. Diminishing odds for a more aggressive policy easing by the Fed and an oversized rate cut in November have kept the US Dollar firm, acting as a headwind for the Gold price, despite geopolitical tensions in the Middle East providing support to the safe-haven asset. Traders are looking to the NFP report for cues on the size of the Fed rate cut and USD demand.
The US Department of Labor reported a marginal increase in jobless claims, alongside a rise in private-sector employment and the Non-Manufacturing PMI, indicating a stable labor market and solid economy. This has tempered expectations for another oversized rate cut, lifting the US Dollar to a one-month high and acting as a headwind for Gold. Geopolitical tensions in the Middle East, including Hezbollah launching projectiles into Israeli territory and Israel retaliating, have raised the risk of a broader conflict and supported the Gold price. Traders are awaiting the NFP report, which is expected to show job growth slightly lower than previous numbers, for further insight into the Fed’s rate-cutting plans and USD demand.
From a technical standpoint, Gold price remains in a bullish consolidation phase, with momentum favoring the upside. Oscillators on the daily chart are in positive territory, suggesting the path of least resistance is upwards. Immediate resistance levels are present at $2,672-$2,673 and $2,685-$2,686, followed by the all-time high at $2,700. Support is seen at the $2,625-$2,624 area, with a break below signaling potential further downside towards $2,560 and $2,535-$2,530 before reaching the $2,500 mark. The Gold price outlook remains dependent on the upcoming NFP report and Fed rate-cut expectations.
Gold has a long history as a store of value and medium of exchange, serving as a safe-haven asset during turbulent times due to its perceived stability against inflation and depreciating currencies. Central banks, particularly those from emerging economies, have been increasing their Gold reserves to improve the strength of their economies and currencies. Gold has an inverse correlation with the US Dollar and US Treasuries, making it a popular choice for diversifying assets during times of market turbulence. Geopolitical instability and economic uncertainty can quickly impact the price of Gold, with the asset mostly influenced by the performance of the US Dollar in global markets.
In conclusion, the Gold price remains stagnant within a narrow trading range as traders await the release of the US NFP report for direction. Geopolitical tensions in the Middle East and solid economic data from the US have kept the price in check, with the US Dollar strength acting as a headwind. Technical indicators suggest a bullish outlook for Gold, with resistance at key levels and support holding firm. Gold continues to be viewed as a safe-haven asset and a hedge against economic uncertainty and currency devaluation, attracting interest from central banks and investors looking to diversify their portfolios. The upcoming NFP report will provide clarity on the Fed’s rate-cutting plans and USD demand, determining the next move in the Gold price.
