XAUUSD H6 | Market View
- Gold prices closed the week at $2,650.35, marking a recovery from earlier losses as traders prepared for critical U.S. economic data and Federal Reserve decisions. The upcoming Non-Farm Payrolls (NFP) report is expected to play a pivotal role in shaping market sentiment. Last month’s payroll growth of just 12,000, affected by temporary factors like Hurricane Milton, raised expectations for a rebound. Consensus estimates suggest job gains of around 220,000 and an unemployment rate of 4.2%.
- A stronger-than-expected NFP report could reduce the likelihood of a December rate cut, boosting the dollar and pressuring gold prices by increasing the opportunity cost of holding non-yielding assets. Conversely, weaker data could fuel expectations for a dovish Federal Reserve, weakening the dollar and providing upward momentum for gold. Inflation remains a complicating factor, as last week’s Core PCE data indicated persistent inflationary pressures, challenging the Fed’s ability to move aggressively toward rate cuts. However, market expectations still favor a 25-basis-point reduction, currently priced at 66%.
- Geopolitical risks continue to support gold as a safe-haven asset. While optimism over ceasefire talks in the Middle East subdued demand earlier in the week, ongoing conflicts, such as the Russia-Ukraine war, remain a source of uncertainty. This backdrop offers strong support for gold, particularly in times of risk aversion. Additionally, sustained central bank buying by major players like China, Russia, and India reinforces long-term demand for the metal.
- Technically, gold is trading near critical levels. Resistance is evident around $2,663, with a sustained move above this level signaling potential for further gains. Conversely, strong support at $2,631 provides a floor for prices. A break below could trigger further consolidation, but this is unlikely given the current geopolitical and economic environment. Traders should expect heightened volatility!
- A stronger-than-expected NFP report could reduce the likelihood of a December rate cut, boosting the dollar and pressuring gold prices by increasing the opportunity cost of holding non-yielding assets. Conversely, weaker data could fuel expectations for a dovish Federal Reserve, weakening the dollar and providing upward momentum for gold. Inflation remains a complicating factor, as last week’s Core PCE data indicated persistent inflationary pressures, challenging the Fed’s ability to move aggressively toward rate cuts. However, market expectations still favor a 25-basis-point reduction, currently priced at 66%.
- Geopolitical risks continue to support gold as a safe-haven asset. While optimism over ceasefire talks in the Middle East subdued demand earlier in the week, ongoing conflicts, such as the Russia-Ukraine war, remain a source of uncertainty. This backdrop offers strong support for gold, particularly in times of risk aversion. Additionally, sustained central bank buying by major players like China, Russia, and India reinforces long-term demand for the metal.
- Technically, gold is trading near critical levels. Resistance is evident around $2,663, with a sustained move above this level signaling potential for further gains. Conversely, strong support at $2,631 provides a floor for prices. A break below could trigger further consolidation, but this is unlikely given the current geopolitical and economic environment. Traders should expect heightened volatility!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.