Gold (XAU) Price Forecast: Bullish Traders Eyeing $2693 Breakout Ahead of NFP Payrolls Report

Gold Prices Push Higher, Testing Critical Levels

Gold prices continued their upward move on Friday, extending gains after breaking above the 50-day moving average of $2,648.17. The market is now focused on establishing support at $2,663.51, a 50% retracement level, while preparing to test the key Fibonacci resistance at $2,693.40.

A successful move above $2,693.40 could trigger an acceleration toward the next significant target of $2,726.30. This week’s performance positions gold for its best weekly gain in seven weeks, driven by growing safe-haven demand.

At 12:15 GMT, XAU/USD is trading $2678.00, up $7.66 or +0.29%.

U.S. Jobs Data To Influence Gold’s Next Move

The U.S. non-farm payrolls report, due at 13:30 GMT, is set to play a key role in shaping gold’s trajectory. Economists project 160,000 jobs were added in December, down from November’s 227,000, with the unemployment rate expected to hold steady at 4.2%. Traders will also be eyeing average hourly earnings that could signal an inflationary trend.

Stronger-than-expected data could limit gold’s rally by tempering expectations of Federal Reserve rate cuts in 2025. However, a weaker report might propel prices closer to $2,700 as traders price in a less aggressive Fed.

Meanwhile, U.S. Treasury yields, which are at their highest levels since April, continue to act as a headwind for gold. Rising yields increase the opportunity cost of holding the non-yielding metal.

Divergent Demand Trends In Global Markets

Demand for gold shows regional divergence. In India, higher prices have widened discounts, dampening consumer interest. In contrast, preparations for the Lunar New Year are bolstering demand in other major Asian markets.

Analysts also point to fiscal concerns in the U.S., with potential inflationary pressures stemming from the incoming administration’s policies. Carsten Menke of Julius Baer highlights doubts over the U.S. dollar’s long-term role as a reserve currency, supporting gold’s appeal.

Gold Price Forecast

Gold remains positioned to test the $2,693.40 resistance level. A break above this key point could pave the way for a move toward $2,726.30, with safe-haven demand and inflation concerns providing support.

However, the outcome of the U.S. jobs report will be pivotal. Stronger payroll data may prompt short-term profit-taking, while weaker numbers could sustain the bullish momentum. Overall, the outlook for gold leans bullish, contingent on breaking critical resistance levels.

More Information in our Economic Calendar.