Gold Price Prediction: XAU Nears $3,556 as Fed Rate Cuts and NFP Loom
Gold (XAU/USD) is rising again in the Asian session, hovering around $3,556 after bouncing off the $3,500 level.
Quick overview
- Gold (XAU/USD) is rising in the Asian session, currently around $3,556, as traders anticipate potential Fed rate cuts later this year.
- The US labor market shows signs of cooling, with the ADP report indicating only 54,000 jobs added in August, below expectations.
- Trade uncertainty and dovish comments from Fed officials are boosting gold's appeal as a safe-haven asset ahead of the upcoming NFP report.
- Technically, gold is in a rising channel with key support at $3,548 and potential resistance levels at $3,578, $3,610, and $3,640.
Gold (XAU/USD) is rising again in the Asian session, hovering around $3,556 after bouncing off the $3,500 level. It’s close to the weekly highs as traders expect the Fed to ease later this year.
Fresh signs of a cooling US labor market reinforced that view. The ADP report showed private employers added only 54,000 jobs in August, missing estimates of 65,000 and below July’s 106,000. Initial jobless claims also rose to 237,000 vs 230,000 expected.
While the ISM Services PMI beat estimates at 52, investors are focused on the bigger labor weakness. Markets now price in at least 2 25bps rate cuts by year end, keeping the US dollar weak and boosting non-yielding gold.
Trade Uncertainty Adds Safe-Haven Demand
Beyond labor market dynamics, trade headlines are adding to gold’s safe-haven appeal. Trump’s order to lower tariffs on Japanese auto imports was overshadowed by his lawsuit to reinstate previously struck down tariffs, adding to policy uncertainty.
Meanwhile Fed officials were cautious. New York Fed President John Williams sees 1.25-1.5% GDP growth in 2024 and rising unemployment. Chicago Fed President Austan Goolsbee noted inflation risks but acknowledged labor weakness.
For investors, the mix of trade uncertainty and dovish policy comments keeps gold in demand ahead of the NFP report, which is expected to show 75,000 jobs added and unemployment at 4.3%.
Technical Outlook: Bulls Eye $3,610 and $3,640
Gold is inside a rising channel that has guided price since late August. The 50-EMA at $3,548 is acting as support, while the 200-EMA at $3,428 is the longer term bullish structure.
The RSI at 57 is steady without going into overbought territory. Recent spinning top candles are short term indecision but the bigger picture is up. A break above $3,578 could trigger buying, targeting $3,610 and $3,640.Tactical longs in the pullback zone $3,540-$3,548 with stops below $3,512. As long as buyers hold this zone, dips are more buy than sell.
Levels:
- Support: $3,548, $3,512
- Resistance: $3,578, $3,610, $3,640
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