Gold Forecast: XAU/USD bulls move to the sidelines ahead of delayed US NFP report

Gold (XAU/USD) attracts some sellers during the Asian session on Tuesday and extends the overnight pullback from the $4,350 region, or the vicinity of the highest level since October 21, touched last week. The intraday downtick comes amid optimism over the Russia-Ukraine peace deal, which is seen undermining demand for the traditional safe-haven commodity. U.S. President Donald Trump said on Monday that an agreement to end the four-year-long war is closer than ever. Apart from this, some repositioning trade ahead of the delayed release of the US Nonfarm Payrolls (NFP) report for October later today, turns out to be another factor exerting pressure on the bullion.

Given that signs of a weakening US labor market are becoming increasingly evident, the crucial jobs data, along with the US consumer inflation figures on Thursday, will influence the Federal Reserve's (Fed) policy path in 2026. This, in turn, will play a key role in driving the US Dollar (USD) demand in the near term and determining the next leg of a directional move for the non-yielding Gold. In the meantime, dovish Fed expectations keep the USD depressed near its lowest level since October 6, touched on Monday. According to CME Group's FedWatch tool, traders are pricing in a nearly 77% probability of a 25-basis-point rate cut by the Fed in January and two rate reductions in 2026.

Furthermore, investors seem convinced that the new Trump-aligned Fed chair will be an uber-dovish and slash interest rates regardless of the economic fundamentals. This has been as a key factor behind the recent USD slump and might continue to act as a tailwind for the Gold. Meanwhile, the defensive mood keeps Asian equity markets under pressure amid valuation concerns and fears of the AI bubble burst. This might contribute to limiting the downside for the XAU/USD, suggesting that any further slide could be seen as a buying opportunity. Hence, it will be prudent to wait for strong follow-through selling before confirming that the bullion's multi-week-old uptrend has run out of steam.

Gold 4-hour chart

Technical Outlook

The overnight failure near the $4,350 area constitutes the formation of a bearish double-top pattern on hourly charts. Moreover, a break and acceptance below the $4,300 mark backs the case for further losses. However, mixed oscillators on the 4-hour chart warrant some caution for aggressive bearish traders. This, in turn, suggests that the Gold price is more likely to find decent support near the $4,260-$4,255 horizontal resistance breakpoint.

The said area could act as a strong base for the XAU/USD pair, which, if broken decisively, might shift the near-term bias in favor of bearish traders. The subsequent decline might then drag the Gold price to the $4,230-4,228 intermediate support en route to the $4,200 round figure and the $4,178-4,177 support.

On the flip side, momentum back above the $4,300-$4,310 region might continue to face a strong hurdle near the $4,350-4,355 zone. Some follow-through buying, however, could allow the Gold price to aim towards challenging the all-time peak, around the $4,380 region, touched in October. This is followed by the $4,400 round figure, which, if cleared, would set the stage for an extension of the recent well-established uptrend.