Gold Prices Forecast: Investors Eye Non-Farm Payrolls Data for XAU/USD Price Cues

Highlights

• Gold steady before U.S. payrolls report
• Fed rate decisions influence gold prices
• Non-farm payrolls could sway gold trends

Gold Traders Awaiting Payrolls Data

Gold prices are currently in limbo, with investors holding their positions in anticipation of the upcoming U.S. October non-farm payrolls report. Spot gold remains relatively static at $1,986.49 per ounce, and futures similarly steady at $1,994.10.

Fed Decisions and Economic Indicators

The market’s inertia reflects broader uncertainty regarding the Federal Reserve’s next move on interest rates. This week’s status quo on rates has led to a lower dollar and Treasury yields, following recent signs of easing inflation and a softening labor market. These factors support a possible cessation of the Fed’s rate hikes for the year, with labor costs unexpectedly dipping and weekly jobless claims rising slightly.

Investor Sentiment and Rate Outlook

Despite gold’s struggle to maintain its momentum beyond the pivotal $2,000 threshold, there is a latent optimism as markets speculate on an 80% probability that rates will remain unchanged in December. However, Fed Chairman Jerome Powell has maintained that the journey to subdue inflation is far from over, not discounting further rate hikes.

Upcoming Non-Farm Payrolls Report

Attention now pivots to the non-farm payrolls data, a potential catalyst for market movement. The forecast suggests an addition of 180,000 jobs, but a weaker than expected report could press Treasury yields lower, potentially propelling gold prices past the notable $2,000 mark.

Short-Term Gold Forecast

In the short term, gold’s direction is hinging on the payrolls outcome. A significantly softer labor market could undermine the Fed’s hawkish stance, offering bullion a chance to reclaim its recent peak. Conversely, a strong jobs report might reinforce the likelihood of further rate hikes, challenging gold’s safe-haven appeal amidst higher opportunity costs for holding the metal.

Technical Analysis

Gold (XAU/USD) is currently trading above both the 200-day and 50-day moving averages, suggesting a bullish bias in the medium to long term.

The current price of 1988.495 is marginally higher than the previous close, indicating a slight uptrend continuation. However, if it approaches minor resistance at 2009.00, the momentum might be tested. Breaching this could signal further upside potential towards the main resistance at 2067.00.

Conversely, should the price retreat, the main support at 1952.21 could serve as a crucial threshold to maintain the bullish outlook.

Current positioning favors cautiously optimistic sentiment with trader reaction to 1987.00 and the outcome of the U.S. Non-Farm Payrolls report setting the tone for the day.