Gold Price Forecast: XAU/USD Closes at $4,510 as NFP Miss; CPI Week to Shape the Next Move
Gold closed near $4,510 after a softer NFP report, with CPI data ahead likely to determine whether prices extend toward $4,550–$4,585.
Quick overview
- Gold closed at around $4,510, showing signs of recovery amid concerns over inflation and weaker US labor data.
- The Non-Farm Payrolls report indicated only a 50,000 job increase, suggesting a slowdown in hiring and reducing expectations for Federal Reserve policy tightening.
- Upcoming inflation data, including the core Consumer Price Index, will be closely watched, with potential implications for gold prices.
- Technically, gold remains in a positive trend, with key support levels and potential for further gains if it maintains above $4,500.
Gold closed out Friday at around $4,510, continuing to stage a recovery as investors sort out softer US labour data against the very real risk of inflation hanging on. The metal heads into the new week perched above a key psychological benchmark and at the moment, that looks more like consolidation of strength than a reversal.
Weekly Recap – NFP Numbers Soothed the Dollar No Longer
Last week, all eyes were on the US labour market. The Non-Farm Payrolls only rose by 50,000 jobs and thats a big miss. This pushed unemployment down to 4.4% but its more evidence that hiring is losing steam and that’s reducing hopes of the Fed further tightening policy anytime soon.
Before that, though, ADP employment had risen by 41,000 and job openings had taken a hit, showing a gentle decline in how much employers are looking for new staff.
Together, it all painted a picture of weaker US growth which actually helped to sustain golds upward momentum right up to the end of the week.
Week Ahead – Inflation to Take Centre Stage
We shift our attention now over to inflation data.
The core Consumer Price Index is expected to come in at 0.3% higher than last month, while headlining CPI is expected to stay put at 0.3%. On an annual basis, we’re still looking at 2.7% inflation – which is something the policymakers will be keen to get in line.
Market-watchers are also looking out for Retail Sales and PPI figures, both expected to show small gains. However, if either of those figures surprise to the downside, that could be a victory for a less-restrictive Federal Reserve which in all likelihood would be good news for gold.
(XAU/USD) Gold Tech Outlook Remains Positive, Upside Bias Intact
Technically, gold remains within a rising channel that’s been intact since the start of the year. The metal recovered smoothly from the $4,436 – $4,445 support zone – which is where the 100-day moving average and channel base are closely aligned – and has since reclaimed the 50-day moving average.
The RSI is hovering in the mid 60s which is indicating things are looking up for gold without getting over-extended. As long as gold can stay above $4,500, the upside is still the preferred call.
If gold can sustain a break above $4,517, we could be looking at $4,550, and then even further on up towards $4,585 which is near the upper boundary of that channel.
However, if the price slips back below $4,445, the bullish structure starts to look a bit weaker, but right now the market appears to be in a holding pattern, waiting for direction.
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