Gold price holds steady ahead of NFP report, bears await strong signal
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Gold prices staged a notable recovery on Friday, climbing near the $2,640 mark after retreating to a one-and-a-half-week low during the Asian session. The market remains cautious, with traders closely monitoring today’s US Nonfarm Payrolls (NFP) report, which could provide fresh insights into the Federal Reserve’s monetary policy trajectory.
Here's a breakdown of the drivers influencing gold and its near-term technical outlook:
Market Dynamics Supporting Gold Prices
Softening US Treasury Yields and USD Weakness
The 10-year US Treasury yield hovers near its lowest levels since late October as markets continue to price in a 70% likelihood of a 25-basis-point rate cut at the Federal Reserve's December meeting.
The US Dollar Index (DXY) remains near multi-week lows, offering support to gold as a non-yielding safe-haven asset. Global Risk Sentiment and Geopolitical UncertaintyGeopolitical risks, including ongoing Russia-Ukraine tensions and fears over US President-elect Donald Trump's proposed tariffs, have dampened appetite for riskier assets. Investors are hedging against market volatility as concerns grow over the global economic outlook under potential trade war escalation.
US Labor Market Signals Thursday’s Initial Jobless Claims report showed an uptick to 224K, fueling speculation that the Fed could maintain a cautious approach to rate cuts, which underpins safe-haven demand for gold.
Technical Analysis: Gold’s Mixed Signals
Resistance Levels
Immediate resistance emerges at $2,649, followed by the $2,655 supply zone. A decisive break above this level could open the door to $2,666, last week’s swing high. Further bullish momentum beyond $2,666 may enable the yellow metal to reclaim the critical $2,700 mark.
Support Levels Initial support lies at the $2,633-2,632 range, with stronger support at the $2,614-2,613 zone. A breach below $2,600 could expose gold to further losses, targeting the 100-day SMA near $2,583 and the November low of $2,537-2,536. A sustained drop below $2,537 would likely accelerate selling pressure, potentially driving gold toward the $2,500 psychological mark.
Outlook and Strategy
Investors remain cautious as gold prices navigate between conflicting forces. The NFP report, set to release later today, is expected to show a recovery in job creation (200K expected, up from 12K in October). A strong labor market report could dampen rate-cut expectations and weigh on gold, while weaker-than-expected data may bolster bullish sentiment.
For traders:
Bullish Case: A break above $2,666 could attract additional buying, signaling strength toward $2,700 and potentially beyond. Bearish Case: A sustained move below $2,600 could trigger a deeper correction toward $2,537 or lower. The short-term bias leans bearish, but directional clarity hinges on how markets interpret today’s data and its implications for Fed policy. --
Here's a breakdown of the drivers influencing gold and its near-term technical outlook:
Market Dynamics Supporting Gold Prices
Softening US Treasury Yields and USD Weakness
The 10-year US Treasury yield hovers near its lowest levels since late October as markets continue to price in a 70% likelihood of a 25-basis-point rate cut at the Federal Reserve's December meeting.
The US Dollar Index (DXY) remains near multi-week lows, offering support to gold as a non-yielding safe-haven asset. Global Risk Sentiment and Geopolitical UncertaintyGeopolitical risks, including ongoing Russia-Ukraine tensions and fears over US President-elect Donald Trump's proposed tariffs, have dampened appetite for riskier assets. Investors are hedging against market volatility as concerns grow over the global economic outlook under potential trade war escalation.
US Labor Market Signals Thursday’s Initial Jobless Claims report showed an uptick to 224K, fueling speculation that the Fed could maintain a cautious approach to rate cuts, which underpins safe-haven demand for gold.
Technical Analysis: Gold’s Mixed Signals
Resistance Levels
Immediate resistance emerges at $2,649, followed by the $2,655 supply zone. A decisive break above this level could open the door to $2,666, last week’s swing high. Further bullish momentum beyond $2,666 may enable the yellow metal to reclaim the critical $2,700 mark.
Support Levels Initial support lies at the $2,633-2,632 range, with stronger support at the $2,614-2,613 zone. A breach below $2,600 could expose gold to further losses, targeting the 100-day SMA near $2,583 and the November low of $2,537-2,536. A sustained drop below $2,537 would likely accelerate selling pressure, potentially driving gold toward the $2,500 psychological mark.
Outlook and Strategy
Investors remain cautious as gold prices navigate between conflicting forces. The NFP report, set to release later today, is expected to show a recovery in job creation (200K expected, up from 12K in October). A strong labor market report could dampen rate-cut expectations and weigh on gold, while weaker-than-expected data may bolster bullish sentiment.
For traders:
Bullish Case: A break above $2,666 could attract additional buying, signaling strength toward $2,700 and potentially beyond. Bearish Case: A sustained move below $2,600 could trigger a deeper correction toward $2,537 or lower. The short-term bias leans bearish, but directional clarity hinges on how markets interpret today’s data and its implications for Fed policy. --