Gold (XAU) Daily Forecast: Gold Slips Amid Fed Rate Speculation—Can $2,645 Support Hold?

Market Overview

Gold prices continued to ease on Thursday, marking a second straight day of decline as the US Dollar strengthened amid robust economic data. The precious metal, currently trading around $2,653, briefly touched an intra-day low of $2,651.93.

A resilient labor market in the United States has reinforced expectations of a more cautious stance by the Federal Reserve, which has weighed on the non-yielding metal.

The recent Job Openings and Labor Turnover Survey (JOLTS) revealed a surprising increase in job vacancies, climbing by 329,000 to 8.04 million in August. This is a notable rise from July’s revised figure of 7.711 million, signaling strong labor demand.

Meanwhile, private-sector employers added 143,000 jobs in September, according to ADP data, surpassing the 120,000 job additions expected by analysts. This strength in the labour market has tempered expectations for a significant near-term easing of interest rates by the Fed.

“The US labor market continues to show unexpected resilience, which complicates the outlook for monetary policy,” said John Carter, senior economist at Apex Research. “The Fed may be inclined to delay rate cuts until 2024 if job growth remains steady.”

Fed Policy in the Spotlight as Dollar Gains Momentum

With the US Dollar Index climbing to a three-week high, gold has come under pressure. The greenback’s recent strength has made the precious metal less attractive to foreign investors, particularly in an environment where other major economies are showing signs of slowing down.

Analysts now anticipate that the Fed will maintain its current rate policy through the end of the year.

“The strong labor data puts a floor under the dollar, making it a challenging environment for gold prices to find support,” said Michelle Thompson, commodities strategist at Global Markets.

Nonfarm Payrolls Report Could Steer Gold’s Next Move

All eyes are now on the Nonfarm Payrolls report set to be released on Friday, which could either bolster or undermine current market sentiment. Economists forecast the addition of 150,000 jobs in September, down from 187,000 in August.

Any deviation from expectations could lead to swift movements in both the dollar and gold markets, as investors gauge the potential implications for the Fed’s policy trajectory.

Short-Term Forecast

Gold prices will remain range-bound between $2,641 and $2,668 in the coming days. A break above $2,655 could signal a bullish shift, while sustained weakness below this level may invite further downside risk.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading slightly lower at $2,653.07, down 0.10% for the session. The metal is hovering around its pivot point of $2,655.20, suggesting a cautious market tone. Immediate resistance stands at $2,663.22, followed by $2,668.47 and $2,674.13.

On the downside, gold has support at $2,645.48, with deeper support levels at $2,641.51 and $2,634.63. Technical indicators show mixed signals.

The 50-day Exponential Moving Average (EMA) at $2,654.08 acts as a short-term resistance, while the 200-day EMA at $2,640.08 serves as a key support level. A break above $2,655 could shift momentum to the upside, while sustained trading below this level may trigger further bearish pressure.