Gold (XAU) Daily Forecast: NFP Report Looms, Support at $2,635 Holds

Market Overview

Gold (XAU/USD) remains firm above $2,640, recovering from mild losses despite the US dollar’s bullish momentum. Supported by ongoing geopolitical uncertainties and expectations for key economic data this week, the precious metal has found a steady foothold.

Investors are closely watching Friday’s Nonfarm Payrolls (NFP) report and Federal Reserve Chair Jerome Powell’s remarks, which are expected to provide clarity on interest rate policies.

US Dollar and Fed Outlook Pressure Gold

The US dollar’s recovery from multi-month lows has added pressure to gold prices, as higher interest rate expectations weigh on the non-yielding metal. The Federal Reserve’s hawkish tone has prompted markets to price in a 75% likelihood of a 25-basis-point rate cut later this month, according to CME Group’s FedWatch Tool.

This cautious optimism has fueled strength in the dollar, with the 10-year Treasury yield hovering near its lowest levels since October.

Economic indicators, such as the Institute of Supply Management’s (ISM) Manufacturing PMI rising to 48.4 in November, have further bolstered sentiment. This suggests potential for economic resilience, particularly amid anticipation of Trump-era business-friendly policies.

Geopolitical Risks Sustain Gold’s Safe-Haven Appeal

Geopolitical tensions remain a significant driver of gold demand. Heightened instability stemming from Russia-Ukraine conflict and North Korea’s alignment with Russia have amplified investor concerns.

Gold, as a traditional safe-haven asset, has benefited from these uncertainties, offsetting some of the downward pressure from a strong US dollar.

Additionally, low US Treasury bond yields have made gold relatively more attractive. With yields declining, gold’s downside risks are limited as traders hedge against broader market volatility.

Market Awaits Key US Economic Data

The spotlight now shifts to the NFP report, which will shed light on the labor market’s health and potentially shift Federal Reserve rate expectations. Traders are also eyeing Powell’s remarks for hints on future monetary policy decisions.

These developments will play a crucial role in shaping short-term gold price movements, with market participants bracing for increased volatility in the coming days.

Gold’s near-term outlook hinges on the balance between economic signals and geopolitical risks, keeping investors on edge.

Short-Term Forecast

Gold prices hold steady above $2,640, balancing geopolitical risks and a stronger dollar. Focus remains on Friday’s NFP report and Powell’s remarks for monetary policy insights.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is holding steady at $2,645.51, up 0.26% on the day, signaling resilience despite a cautious trading environment. The price is hovering above its pivot point at $2,635.63, a key threshold for maintaining bullish momentum.

Immediate resistance lies at $2,652.11, followed by $2,666.24 and $2,678.98, while support levels are observed at $2,621.06 and $2,608.82. The 50-day EMA at $2,643.21 lends near-term support, while the 200-day EMA at $2,648.63 suggests potential overhead resistance.

With the Relative Strength Index (RSI) steady, traders are eyeing a potential rally if prices can break past $2,652.11. However, a fall below $2,635.63 may trigger a reversal, with sharper declines likely.