Gold (XAU) Daily Forecast: October Nonfarm Payrolls Could Dictate Gold’s Short-Term Path

Market Overview

Gold prices (XAU/USD) managed to halt their recent slide, reaching an intraday high of $2,752 on Friday as geopolitical uncertainty and the looming U.S. presidential election bolstered demand for safe-haven assets.

Despite the rebound, analysts caution that rising U.S. Treasury yields and a strong U.S. dollar may limit further gains in the precious metal.

“Gold has found support amid rising geopolitical risks and political uncertainty,” said Han Tan, chief market analyst at Exinity Group. He added that if these concerns persist, “we could see gold testing $2,800 in the near term.”

However, with the U.S. dollar’s resilience and bond yields climbing, gold’s upside potential remains under pressure, as a strong dollar makes gold less attractive to international buyers.

Eyes on U.S. Employment Data and Fed Rate Outlook

Markets are now focused on the upcoming U.S. employment report for October, which will release crucial data such as Nonfarm Payrolls, the Unemployment Rate, and Average Hourly Earnings.

A strong report could reduce expectations for aggressive rate cuts by the Federal Reserve, potentially exerting additional downward pressure on gold.

Recent data shows inflation moderating, with the Personal Consumption Expenditures (PCE) Price Index rising 2.1% year-over-year in September, down from 2.2% in August.

Meanwhile, the core PCE index, which excludes volatile food and energy prices, grew by 2.7%, above market expectations. Additionally, Initial Jobless Claims dropped to 216,000 for the week ending October 26, below the forecast of 230,000, reinforcing the Fed’s cautious stance.

Dollar Strength and Treasury Yields Add to Gold’s Challenges

The strong U.S. dollar, bolstered by higher Treasury yields, continues to put downward pressure on gold prices. Rising yields make interest-bearing assets more attractive compared to non-yielding assets like gold.

Markets are nearly fully priced in for a 25-basis-point rate cut at the Federal Reserve’s upcoming November meeting, which could add further complexity to gold’s outlook.

In summary, while geopolitical tensions and election uncertainty provide support, gold faces significant headwinds from the dollar’s strength and rising Treasury yields. Investors will closely monitor upcoming economic data and the Fed’s rate decision as they weigh the metal’s future direction.

Short-Term Forecast

Gold’s short-term outlook hinges on the $2,760 pivot. A breakout above this level could push prices toward $2,774 and $2,790, while a dip below $2,746 may invite selling pressure.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,752.67, up 0.33% for the session. The price hovers near a key pivot at $2,759, a level that could determine its short-term direction. If gold breaks above $2,760, it could target resistance at $2,774, with further upside potential toward $2,790 and $2,807.

However, if prices slip below $2,746, we may see support at $2,732 and possibly down to $2,718. The 50-day EMA at $2,759 aligns closely with the pivot, reinforcing its significance.

A break above this mark would signal strength, while a failure to hold could invite selling pressure. For now, gold’s outlook remains mixed, pending a clear move above or below the $2,760 mark.