Gold Slides to $4,055 Support as Dollar Strengthens and Traders Brace for NFP
Gold prices softened on Thursday as a firmer U.S. dollar and fading expectations of a December Federal Reserve rate cut pressured...
Quick overview
- Gold prices declined due to a stronger U.S. dollar and reduced expectations for a December Federal Reserve rate cut.
- The dollar index reached a two-week high, making gold more expensive for international buyers as rate-cut bets diminished.
- Traders are awaiting the delayed U.S. non-farm payrolls report, which could influence gold's near-term direction amid a cooling labor market.
- Technical indicators show mixed signals for gold, with potential upward movement above $4,091 and risks of a drop if it fails to reclaim this level.
Gold prices softened on Thursday as a firmer U.S. dollar and fading expectations of a December Federal Reserve rate cut pressured the metal ahead of a delayed U.S. non-farm payrolls report. With the government shutdown pushing key data releases off schedule, traders are navigating a landscape marked by limited clarity and rising uncertainty.
Dollar Strength Pressures Gold
The dollar index climbed to a two-week high, extending a move that has made gold more expensive for international buyers. Analysts say the shift is tied to a rapid unwinding of rate-cut expectations. “Gold is under pressure because markets have sharply scaled back rate-cut bets in recent weeks,” said Kelvin Wong, senior market analyst at OANDA.
Minutes from the Fed’s October meeting added another layer of complexity. While officials did deliver a rate cut, they signaled discomfort about inflation risks and warned that easing too aggressively could hurt the Fed’s credibility. As a result, traders now assign just a 33% probability to a December cut, down from nearly 50% a day earlier.
Markets Await Delayed U.S. Jobs Data
The focus now shifts to the September NFP report, expected later today. With the labor market cooling in recent months, a soft reading could revive confidence in early-2026 easing. For gold, historically sensitive to shifts in rate expectations, the report may shape near-term direction.
Gold Technical Outlook Turns Mixed
Gold is attempting to stabilize after last week’s sharp retreat, but the technical picture remains divided. On the 2-hour chart, price is holding just above the 0.236 Fibonacci retracement at $4,055, a key intraday pivot. The broader structure shows gold trading below a descending channel formed after the $4,244 swing high, though short-term action still prints higher lows, an early sign of base-building.
Candlestick patterns reflect hesitation rather than conviction. Spinning tops and thin-bodied candles suggest buyers are active but cautious. The 20-EMA is flattening, while RSI near 50 signals neutrality rather than fresh momentum.
A breakout above $4,091 would shift bias upward and open a path toward $4,121, followed by $4,149. Failure to reclaim this zone risks a drop toward $3,997 and $3,964.
Gold (XAU/USD) Trade Setup
A conservative long setup emerges above $4,092 if a bullish engulfing candle confirms control. Stops can sit below $4,054, targeting $4,121 and $4,149. A bearish rejection at $4,091 could offer a short entry toward $4,000 for traders anticipating another retest of lower support.
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