Gold Price Outlook: XAU/USD Targets $2,675 Resistance Ahead of Nonfarm Payrolls Data
Gold prices have been trading with a slight upward bias at $2,663.05, following a breakout from a symmetrical triangle pattern.
Gold prices have been trading with a slight upward bias at $2,663.05, following a breakout from a symmetrical triangle pattern.
This technical formation indicates a potential bullish trend as the metal looks to test the immediate resistance at $2,666.56.
https://t.co/yvZUZ8DlMk #XAUUSD – $Gold Daily
Supports : 2630.00 , 2620.00 & 2600.00
Resistances : 2675.00 , 2685.00 & 2710.00
As long as 2630.00 support holds, we can see aggressive move Up towards 2800.00 area.
If 2620.00 lost, we’ll be watching deeper correction.
Above…
— Jay Meisler (@GVIForex) October 3, 2024
A successful breach of this level could pave the way for higher price targets at $2,674.02 and $2,683.12. This upward movement occurs amid crucial US economic data releases, which could further influence the precious metal’s performance.
On Thursday, the US reported 225,000 initial unemployment claims, slightly above expectations of 222,000. Meanwhile, the ISM Services PMI rose to 54.9, surpassing the forecast of 51.7.
⚠️BREAKING:
*U.S. JOBLESS CLAIMS RISE 225,000; EST. 222,000; PREV. 219,000
🇺🇲🇺🇸 pic.twitter.com/awU0TGs8cj
— Investing.com (@Investingcom) October 3, 2024
Strong labour data typically strengthens the US dollar, which can inversely affect gold prices. However, gold’s resilience in a stronger dollar suggests underlying demand, possibly driven by safe-haven buying due to economic uncertainty.
The next big event to watch is Friday’s Non-Farm Payrolls (NFP) report. Analysts expect a modest increase of 147,000 jobs for September, while the unemployment rate is forecast to hold steady at 4.2%.
If the NFP data rises to the upside, gold could face resistance, but a weaker report might trigger more buying interest in the precious metal.
Gold Price Outlook: Technical Outlook
Gold’s current technical setup points to an optimistic outlook. The breakout above the symmetrical triangle pattern has led to the metal hovering around $2,663.05.
By analyzing the gold chart on the 30-minute timeframe, we can see that yesterday, as expected, gold started to decline and hit the targets at $2647, $2644, and $2641, giving us a return of about 120 pips! Currently, gold is trading around the $2646 level, and I still expect… pic.twitter.com/TVZnAw59t4
— Arman Shaban (@Arman_Trading) October 3, 2024
Immediate resistance is positioned at $2,666.56. If prices surpass this barrier, the next resistance levels to watch are $2,674.02 and $2,683.12. Conversely, strong support is established at $2,654.48, followed by $2,646.95 and $2,637.12.
- 50-Day EMA: $2,654.48
- 200-Day EMA: $2,653.23
- RSI (Relative Strength Index): Currently at 59.49, indicating a build-up of bullish momentum, but not yet at overbought levels.
A sustained move above the 50-day EMA is crucial for further bullish confirmation. Meanwhile, a drop below the $2,654.48 support could signal a consolidation phase before the next potential upward move.
Traders should also keep an eye on the RSI; a reading above 70 would suggest an overbought condition, potentially leading to an A pullback.
Key Levels to Watch:
- Immediate Resistance: $2,666.56
- Next Resistance: $2,674.02
- Immediate Support: $2,654.48
- Next Support: $2,646.95
Market Sentiment and Impact of Upcoming Data
Market sentiment remains cautious as traders await the NFP data. A stronger-than-expected NFP report could boost the USD, thereby putting pressure on gold prices.
Conversely, weaker job data could lead to renewed buying interest in the metal as it acts as a hedge against economic uncertainty.
Moreover, the upcoming average hourly earnings report, forecasted at 0.3% growth month-over-month, will be closely monitored.
Tomorrow the market reports September's job report.
If it looks anything similar to August (hiring slow down and wages ticking up) and we get a similar reaction watch for volatility. pic.twitter.com/c9AZ1eV1gp
— ChartLook (@chart_look) October 4, 2024
A higher wage growth rate could stoke inflation fears, adding to gold’s appeal as an inflation hedge. If the unemployment rate holds steady at 4.2% or increases, it could further shift market sentiment towards safe-haven assets like gold.
Overall, gold remains in a favourable position for an upward move as long as it sustains its position above key support levels.
However, market participants should remain vigilant, as any major deviation in upcoming economic data could rapidly change the technical outlook.
Summary Bullet Points:
- Gold price level: trading at $2,663.05, supported by a bullish breakout above the symmetrical triangle.
- Key Resistance and Support: Resistance at $2,666.56, $2,674.02; support at $2,654.48 and $2,646.95.
- Upcoming Event Risk: NFP data could heavily influence gold’s next move, with forecasts of 147,000 new jobs and a 4.2% unemployment rate.
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