XAU/USD Current price: $2,418.90

  • The mood improved after the United States published encouraging employment figures.
  • Concerns about Federal Reserve’s interest rate cuts remain in the background.
  • XAU/USD trades with a firmer tone and may extend its advance once beyond $2,424.

Spot Gold is on the run after recovering the $2,400 mark, peaking at $2,424.01 in the American trading session. The bright metal surged as encouraging United States (US) data brought some relief to financial markets, weighing on US Dollar demand. The Greenback, however, is firmer against the Swiss Franc (CHF) and neutral against the Japanese Yen (JPY).

Wall Street trimmed early gains and trades with a firm tone following the release of Initial Jobless Claims, which decreased to 233K from a previously revised 250K, also better than the 240K anticipated. In the absence of major news, the encouraging figure underpinned the mood and helped US indexes reverse most of their Wednesday losses.

Gold’s advantage could be understood by persistent speculation the US Federal Reserve (Fed) will deliver more aggressive rate cuts than previously estimated. A few months ago, speculative interest was considering one timid cut before year-end, with limited hopes for a second one. However, the latest macroeconomic data suggesting the economy could face a recession spurred speculation of potential three cuts before year-end. Even further, market participants are starting to believe the Fed could trim rates before the upcoming September meeting in an out-of-schedule move.

Today’s employment-related data spurred some optimism, but it seems pretty irrelevant when compared to the tepid Nonfarm Payrolls (NFP) report released last Friday, partially responsible for the latest panic trading. Overall, it seems that speculative interest has finally priced in more aggressive rate cuts and is now waiting for the next catalyst.

XAU/USD short-term technical outlook  

XAU/USD is firmly up after closing in the red for five consecutive days but is still confined within Fibonacci levels. The pair is currently trading around the 38.2% retracement of the June/July rally at $2,411.20, an immediate near-term support. The 23.6% retracement provides resistance at $2,438.80.

Meanwhile, technical readings in the daily chart support a bullish extension, particularly if the pair extends its intraday rally before the aforementioned high. Technical indicators have turned firmly north but remain within neutral levels. At the same time, XAU/USD battles a flat 20 Simple Moving Average (SMA) but remains above bullish 100 and 200 SMAs.

Technical readings in the 4-hour chart skew the risk to the upside, but the momentum seems limited. The pair is currently trading above a mildly bearish 100 SMA, while the 20 and 200 SMAs lack directional strength below it. Finally, technical indicators are entering positive ground with modest upward slopes, not enough to confirm another run north.

Support levels: 2,411.20 2,397.90 2,388.10

Resistance levels: 2,424.00 2,438.80 2,452.90

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD treads water just above 1.0400 post-US data

EUR/USD treads water just above 1.0400 post-US data

Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.

EUR/USD News
GBP/USD remains depressed near 1.2520 on stronger Dollar

GBP/USD remains depressed near 1.2520 on stronger Dollar

Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.

GBP/USD News
Gold keeps the bid bias unchanged near $2,700

Gold keeps the bid bias unchanged near $2,700

Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.

Gold News
Geopolitics back on the radar

Geopolitics back on the radar

Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.

Read more
Eurozone PMI sounds the alarm about growth once more

Eurozone PMI sounds the alarm about growth once more

The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Majors

Cryptocurrencies

Signatures