Gold Price Forecast: XAU/USD awaits Fed Chair Powell’s speech for a fresh directional impetus


  • Gold price stays supported near $2,650 ahead of US data and Fed Chair Powell’s speech.    
  • The US Dollar derives strength from risk aversion on China's woes and the Fed’s future rate cuts uncertainty.
  • Technically, Gold price regains the 21-day SMA at $2,636, but the daily RSI flatlines near 50.

Gold price is holding onto minor bids early Wednesday, struggling to build on the previous bounce, anticipating a fresh batch of top-tier US economic data releases and Federal Reserve (Fed) Chairman Jerome Powell’s speech.   

Gold price looks to US ADP data and Powell for fresh cues

Tuesday’s US JOLTs Job Openings data indicated a stronger-than-expected labor market after rising to 7.744 million in the reported period. Data surpassed the expected 7.48M increase. The upbeat labor data from the US briefly lifted the US Dollar (USD) across the board, capping the Gold price rebound near $2,655.

However, Gold buyers retained control as the Greenback failed to sustain the uptick. The data failed to alter the market’s expectations of a 25 basis points (bps) interest rate cut by the Fed later this month. Markets are currently pricing at a 73% probability of a Dec Fed rate reduction, the CME Group’s FedWatch Tool shows, more or less the same as a day ago.

In Wednesday’s trading so far, Gold price is struggling to extend its upside as the USD remains in demand due to a risk-averse market environment. China’s economic concerns and US-Sino trade tensions continue to dent risk sentiment. China’s Caixin Services PMI unexpectedly dropped to 51.5 in November against the expected increase to 52.5 following October’s 52.0 figure.

On Tuesday, China’s Commerce Ministry announced a ban on exports of dual-use items related to gallium, germanium, antimony and superhard materials to the US with immediate effect, in response to the latest crackdown on China's chip sector by US President Joe Biden's administration.          

If risk-aversion intensifies, Gold price could face a tailwind effect as it is considered a traditional safety net. However, the next directional move in Gold price hinges on the US ADP Employment Change data and Fed Chair Powell’s speech. The US private sector is expected to see a job gain of 150K in November, compared to 233K in October.

A worse-than-expected labor data could revive expectations of future Fed rate cuts beyond December, fuelling a fresh advance in the non-interest-bearing Gold price. But any reaction to the US data is likely to be shorted-lived as Powell’s words are set to shape up the market expectations of the Fed’s easing trajectory, influencing Gold price action in the lead-up to Friday’s US Nonfarm Payrolls data.

It’s worth mentioning that it will be Powell’s last appearance before the Fed enters the ‘blackout period’ on December 7 ahead of the December 17-18 policy meeting.

Gold price technical analysis: Daily chart

The daily chart shows that Gold's price extends its struggle with critical short-term 21-day Simple Moving Average (SMA), now at $2,636.

The 14-day Relative Strength Index (RSI) sits listlessly beneath the 50 level, indicating a lack of clear directional bias.  

However, the previous week’s Bear Cross warrants caution for Gold buyers.

Therefore, Fed Chair Jerome Powell’s words are likely critical for the next directional move in Gold price.

Recapturing the 21-day SMA support-turned-resistance at $2,636 is critical for buyers to revive the recovery momentum.

The next relevant resistance aligns at the 50-day SMA at $2,669, above which the $2,700 level will be in sight.

On the downside, Gold sellers need to crack the $2,621 static support to challenge the previous week’s low of $2,605.

A sustained break of that level could expose the 100-day SMA at $2,579.

Economic Indicator

Fed's Chair Powell speech

Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

Read more.

Next release: Wed Dec 04, 2024 18:45

Frequency: Irregular

Consensus: -

Previous: -

Source: Federal Reserve

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD accelerates losses to 1.0930 on stronger Dollar

EUR/USD accelerates losses to 1.0930 on stronger Dollar

The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.

EUR/USD News
GBP/USD plummets to four-week lows near 1.2850

GBP/USD plummets to four-week lows near 1.2850

The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.

GBP/USD News
Gold trades on the back foot, flirts with $3,000

Gold trades on the back foot, flirts with $3,000

Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.

Gold News
Can Maker break $1,450 hurdle as whales launch buying spree?

Can Maker break $1,450 hurdle as whales launch buying spree?

Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.

Read more
Strategic implications of “Liberation Day”

Strategic implications of “Liberation Day”

Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Majors

Cryptocurrencies

Signatures

Best Brokers of 2025