Gold News: Powell’s Speech vs. Friday’s NFP – Which Will Drive a Market Breakout?

Prices Steady as Investors Await Key Economic Data, Powell’s Speech

Gold prices remained flat on Wednesday as trading volume and volatility stayed low for the seventh consecutive session, signaling investor indecision ahead of major economic events. Market participants are closely watching U.S. jobs data and Federal Reserve Chair Jerome Powell’s speech for insights into the central bank’s monetary policy outlook.

At 12:38 GMT, XAU/USD is trading $2642.81, down $1.08 or -0.04%.

Technical Levels Highlight Rangebound Trade

Gold has been rangebound since November 25, with support at $2629.13 to $2607.35 and resistance between $2663.51 and $2693.40. The current trend is down, with a main top at $2790.17 and a secondary lower top at $2721.42. A break above $2721.42 would signal an upward trend reversal, while a move below the nearest bottom of $2536.85 would confirm a downtrend.

Adding to bearish sentiment, gold remains below the 50-day moving average at $2668.98, which is acting as resistance and controlling the intermediate trend.

Dollar Strength and Geopolitical Risks Offset Each Other

The U.S. dollar index rose slightly, making gold pricier for holders of other currencies. However, geopolitical instability in South Korea and France has bolstered safe-haven demand for gold.

South Korea faces political upheaval as lawmakers push for President Yoon Suk Yeol’s resignation following his brief declaration of martial law. In France, no-confidence motions against Prime Minister Michel Barnier have heightened political uncertainty.

Market Awaits Critical Data and Powell’s Comments

Gold traders are eyeing the U.S. ADP employment report, due Wednesday, along with Powell’s address for clues about the Federal Reserve’s next move. Friday’s nonfarm payrolls report and next week’s CPI data are also expected to influence the Fed’s decision on whether to cut rates at its December 18 meeting.

According to the CME Group’s FedWatch Tool, traders currently see a 74% likelihood of a 25-basis-point rate cut. Federal Reserve officials have recently signaled support for future rate reductions as inflation eases. Lower interest rates typically enhance gold’s appeal by reducing the opportunity cost of holding non-yielding assets.

Market Forecast

Gold prices are likely to remain rangebound in the short term unless upcoming jobs or inflation data shifts the outlook for Fed policy significantly. A break above resistance at $2693.40 could push prices higher, while failure to hold support at $2607.35 may trigger further declines. Traders should watch the ADP report and Powell’s comments for potential catalysts. For now, the outlook remains cautiously bearish.

More Information in our Economic Calendar.