Gold Prices Forecast: XAU/USD Steady Ahead of US Non-Farm Payrolls Report

Highlights

• Gold Steady Before U.S. Payrolls Report
• Focus on unemployment rate and average hourly earnings
• Dollar Strength Influences Gold’s Weekly Decline
• Fed Meeting to Shape Gold’s Near-Term Outlook

Gold Prices Steady Ahead of U.S. Jobs Report

Gold (XAU/USD) prices are relatively stable on Friday, with markets closely monitoring the upcoming U.S. Non-Farm Payrolls report at 13:30 GMT, for clues about potential Federal Reserve rate cuts. Spot gold has seen a slight increase, while U.S. gold futures are unchanged, as investors await the key labor market data. Immediately after the report, trader focus will shift to next week’s Federal Reserve policy decisions.

Weekly Performance and Rate Cut Expectations

This week, gold is on track for its first weekly decline in four, mainly due to a firmer dollar. However, the precious metal has maintained support above the $2,009 per ounce level. Earlier in the week, gold reached a record high, fueled by expectations of a Fed rate cut, but uncertainty over the cut’s timing caused a subsequent drop.

Economic Data and Market Sentiment

Recent U.S. economic reports have hinted at a cooling labor market, potentially influencing the Fed’s rate policy. Notably, ADP’s employment change report showed fewer private payrolls added in November than expected. Additionally, the Job Openings and Labor Turnover Survey (JOLTS) indicated a significant decline in job openings in October. These factors, combined with lower-than-expected weekly jobless claims, suggest a gradual slowing of the labor market.

Fed’s Upcoming Policy Meeting and Dollar Index Movements

As the Federal Reserve’s policy meeting approaches, markets are pricing in a 59% chance of a U.S. rate cut by March. The dollar index is set to break a three-week losing streak, which could impact gold prices, making it more expensive for holders of other currencies.

Short-Term Forecast: Focus on Labor Market Data

In the short term, the gold market’s focus will be on the U.S. non-farm payrolls report, particularly on the unemployment rate and average earnings. Any significant deviation from expectations in these metrics could heavily influence market reactions and gold prices. Overall, the precious metal’s outlook hinges on the interpretation of labor market data and its potential impact on Fed policy.

Technical Analysis

The current daily price of Gold (XAU/USD) at 2029.55 is trading above both the 200-day and 50-day moving averages, positioned at 1950.93 and 1960.99 respectively. This indicates a bullish sentiment as the price is comfortably above these key moving average benchmarks.

Additionally, the price is currently between the minor support level at 2009.00 and the minor resistance level at 2067.00. This placement suggests the market is in a consolidation phase within this range.

The proximity to the minor resistance level might lead to a test of this threshold. If the price successfully breaches the 2067.00 resistance, it could signal further bullish momentum. Conversely, a drop below the 2009.00 support level may shift the sentiment towards bearish.

However, given the current position above key moving averages and support levels, the short-term market sentiment for Gold appears to be bullish.