Gold News: Can Friday’s Payrolls Report Reverse Gold’s Weekly Decline?

Gold Consolidates After Support Test

Spot gold has edged higher on Friday following a successful defense of its key support zone between $2,629.13 and $2,607.35. Prices briefly touched a session low of $2,613.11, holding above the $2,605.31 low from November 26 but failing to break lower with conviction.

On the upside, resistance around the 50-day moving average of $2,667.96 and the 50% Fibonacci retracement at $2,663.51 continues to cap gains. A breakout above these levels could open the door for a test of $2,693.40.

The technical picture reflects a bearish tone as the “path of least resistance” favors the downside. If prices breach $2,605.31 decisively, the next target is the major support zone between $2,538.50 and $2,536.85.

At 12:52 GMT, XAU/USD is trading $2638.24, up $6.31 or +0.24%.

Market Sentiment Weak Ahead of Jobs Data

Gold is set for a second consecutive weekly decline, with bullion losing approximately 0.5% this week. Recent outflows from physically-backed gold exchange-traded funds (ETFs), as reported by the World Gold Council, further signal cautious sentiment among traders.

Investor focus has shifted to the U.S. nonfarm payrolls report due later on Friday. Forecasts project a robust 200,000 jobs gain for November, rebounding from October’s hurricane-disrupted 12,000 increase. A strong report could reaffirm the Federal Reserve’s cautious approach to rate cuts, potentially boosting the U.S. dollar and pressuring gold prices.

Fed Policy Outlook in Focus

Federal Reserve Chair Jerome Powell emphasized this week that the U.S. economy is performing stronger than anticipated, which could temper the case for aggressive monetary easing. The CME FedWatch tool indicates a 68% probability of a 25-basis-point rate cut in December, but a strong jobs report could reduce these odds. Lower interest rates typically increase gold’s appeal, but any delay in Fed easing may weigh on the metal in the short term.

Gold Prices Forecast

In the near term, gold prices are likely to remain range-bound between the $2,607.35 support and $2,667.96 resistance. The U.S. payrolls data could act as a catalyst for directional moves. A stronger-than-expected jobs report would likely reinforce dollar strength and push gold lower towards the $2,538.50 level. Conversely, weaker data could support a recovery above $2,663.51, with potential gains extending toward $2,693.40. Traders should remain vigilant for volatility as the labor market data unfolds.

More Information in our Economic Calendar.