The precious metal GOLD has established support just above the $2,020 mark early Wednesday, halting its two-day descent from the record peaks of $2,144 reached on Monday. The stabilization in gold prices coincides with a widespread pullback of the U.S. dollar, as market participants pause their buying spree in anticipation of the forthcoming U.S. ADP Employment figures.

Despite the overall cautious sentiment in the markets, the dollar faces headwinds, partly due to the latest assessment by Moody’s, which shifted its perspective on China’s creditworthiness to negative.

This shift has steered investors away from riskier assets, inadvertently providing a buffer to gold’s value.

Yet, any significant recovery in gold prices may be tempered by the slight increase in U.S. Treasury yields, reflecting a persistent 60% market expectation of a Fed rate reduction come March.

Data from Tuesday, including the ISM Services PMI for November, which suggested strengthening service sector activities, and a drop in U.S. JOLTS Job Openings to the lowest in over two years, did little to significantly sway market projections of the Fed’s rate path.

Market focus now shifts to the ADP Employment Change data, a precursor to Friday’s critical Nonfarm Payrolls, both of which are instrumental in gauging the health of the U.S. labor market.

Gold’s trajectory will also be influenced by the prevailing risk appetite, with implications for both the dollar’s movement and yield dynamics.

From a technical standpoint, GOLD prices have nudged closer to the supportive boundary of the established bullish channel, with a nascent rebound indicating a potential resurgence of the primary uptrend. The rise is expected to initiate at the 2075.25 region, bolstered by positive signals from the stochastic oscillator.

A breach above the 2028.00 level could facilitate this ascent, whereas a downturn through the 2006.00 support might signal the commencement of a corrective bearish phase.

Today’s anticipated trading range is set between support at 2010.00 and resistance at 2050.00, with the day’s trend forecasted to lean bullish.

Gold XAU Live Chart