Gold (XAU) Daily Forecast: Awaits NFP, XAU Holds Near $2,300 Amid Rate Pause

By:

Arslan Ali

Published: May 3, 2024, 06:10 GMT+00:00

Key Points:

Gold prices modestly rise to $2,303.01, up 0.11%, as markets await US Nonfarm Payrolls data.
Federal Reserve's pause on rate hikes lessens pressure on gold, supports prices amid dollar's dip.
Upcoming US economic data, including job figures and PMI, crucial for future gold price movements.

In this article:

Gold

+1.43%

Market Overview

In today’s trading session, gold prices have shown a modest increase, currently at $2,303.01, up by 0.11% ahead of the pivotal US Nonfarm Payrolls (NFP) report. Gold prices (XAU/USD) demonstrate stability, maintaining a position above the nearly one-month low observed earlier this week.

As the Asian session progresses, investors adopt a wait-and-see approach, delaying major transactions until the NFP data is released, which could significantly influence the Federal Reserve’s interest rate decisions.

Impact of Federal Reserve’s Policy on Gold Prices

The Federal Reserve’s recent announcement signaling a halt on rate hikes has marginally alleviated pressure on gold, traditionally a non-yielding asset. This decision contributed to the dollar’s depreciation to its lowest in three weeks, indirectly supporting gold prices.

Global Market Sentiment and Gold’s Safe-Haven Status

The prevailing risk-on sentiment in global equity markets further challenges gold’s appeal as a safe haven. As investors gravitate towards higher-risk assets, gold’s potential for significant gains is capped.

This environment, combined with the Fed’s tempered stance on monetary policy, suggests that gold may persist in its consolidation phase until more definitive economic signals or policy changes emerge.

Key Economic Indicators to Watch

The upcoming release of several critical US economic indicators will likely sway market sentiment and impact gold prices. Forecasts suggest the addition of 238,000 jobs in April, with the Unemployment Rate expected to remain stable at 3.8%.

Additionally, forthcoming data from the Final Services PMI and ISM Services PMI will offer deeper insights into the economic conditions influencing gold.

Gold Prices Forecast

GOLD Price Chart

In today’s trading session, gold prices have shown a modest increase, currently standing at $2,303.01, up by 0.11%. The metal confronts a pivotal resistance at the $2,314.02 level, which aligns closely with the downward trendline suggesting resistance might persist here.

Technical indicators, including the 50-day and 200-day Exponential Moving Averages at $2,311.39 and $2,320.36 respectively, further support the view that gold may continue to face downward pressure.

Notably, should gold break below its immediate support level at $2,282.52, a deeper decline could ensue. Conversely, a surge above $2,314.02 may signal a shift to a more bullish outlook for the commodity.

About the Author

Arslan Aliauthor

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

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