Gold Price Analysis: XAU Holds at $2,650; Markets Eye Fed Rate Cuts and US Jobs Data
Gold prices held firm at $2,649.42 on Wednesday, rising 0.18% intraday as markets awaited pivotal U.S. jobs data and Federal Reserve Chair Jerome Powell’s comments later today.
The spotlight is on the U.S. ADP employment report due at 13:15 GMT, which precedes Friday’s critical non-farm payrolls data. Traders anticipate these events will provide key insights into the Fed’s December rate decision.
Market sentiment suggests a cautious stance, with the CME Group’s FedWatch Tool indicating a 73% probability of a 25-basis-point rate cut this month. However, expectations for 2025 remain subdued, with projections of just 80 bps in total reductions.
Non-yielding bullion tends to benefit in low-rate environments, but uncertainty over the depth of future cuts has kept gold’s price movement restrained.
Technical Outlook: Symmetrical Triangle Signals Breakout
Gold’s price action on the 2-hour chart is consolidating within a symmetrical triangle pattern, reflecting market indecision. The pivot point sits at $2,643.80, a critical level for traders assessing future direction.
Immediate resistance is observed at $2,651.26, with further barriers at $2,665.85 and $2,686.75. On the downside, support levels are positioned at $2,638.36, $2,623.03, and $2,607.54.
Technical indicators provide mixed signals. The RSI at 55.27 leans slightly bullish, reflecting mild upward momentum. The 50-day EMA aligns with the pivot at $2,643.80, acting as robust support. A breakout above $2,665.85 could confirm a bullish trend, targeting higher levels. Conversely, a decline below $2,638.36 might signal deeper corrections, with potential targets near $2,594.
Key technical insights:
Resistance levels: $2,651.26, $2,665.85, $2,686.75.
Support levels: $2,638.36, $2,623.03, $2,607.54.
RSI: Neutral at 55.27, favoring mild bullish momentum.
Jobs Data and Powell’s Remarks in Focus
The upcoming ADP employment data and Powell’s comments are critical drivers for gold’s near-term trajectory. Tuesday’s JOLTS report showed moderate increases in U.S. job openings, alongside declining layoffs, hinting at labor market resilience. A strong jobs report could lead the Fed to adopt a more cautious stance on future rate cuts, potentially weighing on gold prices.
Meanwhile, gold’s longer-term prospects remain optimistic. Rising trade tensions, geopolitical uncertainty, and concerns over U.S. fiscal policies could bolster demand for the safe-haven asset. However, technical analysts caution that a breach below $2,621 could trigger a decline toward $2,594–$2,608.
Traders are advised to monitor key economic data and gold’s symmetrical triangle pattern closely for signs of a decisive breakout.
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