Gold Prices Forecast: XAU/USD Stable with Eyes on Non-Farm Payrolls, Rate Hikes

Interest Rates and Treasury Yields

Gold’s performance has been largely influenced by Federal Reserve policies and Treasury yields. The Fed began raising interest rates in March 2022 and shows no signs of easing off, thereby making gold—an asset that provides no yield—less attractive. The recent decrease in 10-year bond yields and a softer dollar has somewhat relieved pressure on gold, but not enough to signal a bullish market.

Labor Market Signals

Economists are projecting a 170,000 increase in September’s non-farm payrolls, down from a 187,000 uptick in August. The ADP report released on Wednesday showed service sectors accounting for most job gains, but overall job growth was slower than expected. This tepid data could indicate a potential slowdown in interest rate hikes by the Fed.

Short-Term Forecast: Cautiously Bearish

In the immediate term, the gold market is cautiously bearish, restrained largely by elevated Treasury yields and Fed policies. However, the metal could see a rally if the upcoming economic reports underperform expectations. For now, it would be wise for those long on gold to hold their positions because it looks as if the worst of the selling is over, although the outlook remains dicey.

Technical Analysis

Spot Gold (XAU/USD) is currently trading below both key indicators with a current Daily price of 1824.57. The 200-Day moving average stands at 1927.85, and the 50-Day at 1910.48, signaling a bearish trend in the market. The Daily price is also below the minor and main support levels, reinforcing the bearish sentiment.

However, it’s worth noting that the current Daily price did see a slight uptick from the previous close of 1821.32, suggesting minor bullish activity in an otherwise bearish landscape. Overall, the current market sentiment for Spot Gold leans bearish.