Gold (XAU) Daily Forecast: Market Awaits Key U.S. Data—Will Gold Maintain its Bullish Momentum?

Market Overview

Gold prices eased on Tuesday, pulling back from last week’s record high of $2,685.42 per ounce. Despite this dip, the yellow metal remains on track for its best quarterly gain in over eight years, driven by the U.S. Federal Reserve’s rate cut and renewed investor interest in safe-haven assets.

Bullion has surged 14% this quarter, the highest since January 2016, and is up nearly 6% in October alone.

The Fed’s recent half-percentage-point rate cut, coupled with China’s initiation of new stimulus measures, has spurred buying interest. Meanwhile, ongoing geopolitical tensions have further bolstered gold’s appeal.

“We expect the next leg higher to come from ETF investors, whose holdings are still significantly below their previous peak,” said Giovanni Staunovo, a commodities analyst at UBS.

“With weaker U.S. economic data, the Fed is likely to cut rates further, potentially pushing gold prices up to $2,900 per ounce over the next 12 months.”

Key U.S. Data and Fed Comments in Focus

U.S. economic data, set to be released during the session, includes ISM Manufacturing PMI and JOLTS Job Openings. Analysts expect the ISM Manufacturing PMI to rise slightly to 47.6, while job openings are forecasted to ease to 7.64 million from 7.67 million.

If the data shows weakness in the labor market or manufacturing sector, it could reinforce expectations of further Fed rate cuts.

This week, market participants will closely monitor several key U.S. economic indicators, including the ADP employment report (forecast: 145,000) and the highly anticipated non-farm payrolls data (forecast: 144,000) set for release on Friday.

These reports will provide valuable insights into the health of the labor market and the Fed’s policy outlook.

“Any signs of economic weakness or dovish remarks from the Fed could support further gold gains,” noted Ross Norman, an independent market analyst.

Additionally, Fed Chair Jerome Powell and Governor Michelle Bowman are scheduled to speak, with their comments likely to influence gold’s near-term direction.

Short-Term Forecast

Gold remains under cautious bearish pressure, trading below its pivot point at $2,641.87. A break above $2,649.83 could trigger bullish momentum, while support at $2,630.95 is crucial.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,638.45, up 0.18% in early session trading. The precious metal is holding above its key support at $2,630.95 but remains below its pivot point of $2,641.87, indicating a cautious bearish bias.

Immediate resistance is seen at $2,649.83, aligned closely with the 50-day Exponential Moving Average (EMA) at $2,647.21, which could act as a ceiling for any short-term gains.

A break above this level may signal a bullish reversal toward $2,659.65. On the downside, a slip below $2,630.95 could prompt further selling pressure, targeting support at $2,622.85.

Overall, the downward channel suggests sellers maintain control unless a breakout above $2,642 materializes.