XAU/USD outlook: Bulls return to play, US jobs data eyed for near-term direction

Slobodan Drvenica Windsor Brokers

Gold shined Thursday, advancing around 0.85% and reversing the largest part of corrective pullback from new all-time high ($2531) which found a solid ground at strong $2470 support zone, where a higher base is forming.

The yellow metals remains supported by strong physical buying by the central banks and governments, as well as safe haven buying against growing concerns about slowing economic growth and geopolitical tensions which persistently threaten escalation.

Strong signals that the US Federal Reserve will start easing its monetary policy from this month, add to gold’s brightening outlook.

The latest releases of data from the US (JOLTS / ADP reports) warned that US labor sector is losing traction and boosted expectations for more aggressive steps by Fed (bets for 0.5% rate cut against widely expected 0.25% cut, are rising) in September policy meeting.

Markets await release of US NFP report (the most significant) which will provide clearer picture about the situation in the US labor sector and determine the magnitude of Fed’s action.

Improving technical picture on daily chart supports the notion, as long tails of daily candles in past two days, point to strong bids, with return above psychological $2500 level (also daily Tenkan-sen) and retracement of more than 76.4% of $2531/$2471 pullback, contributing to signals that corrective phase is likely over.

Near-term focus shifted to the upside however, we need to see the results of NFP report of Friday, to get clearer direction signals.

Gold price may retest new record high if nonfarm payrolls disappoint expectations, but stronger than expected August numbers, on the other hand, may deflate fresh bulls.

Psychological $2500 level marks solid support, guarding lower trigger at $2470, while $2531 marks an upper pivot, violation of which to spark fresh acceleration into uncharted territory.

Res: 2523; 2531; 2545; 2554

Sup: 2500; 2494; 2485; 2470

Interested in XAU/USD technicals? Check out the key levels

1. R3 30.23
2. R2 29.7
3. R1 29.26
PP 28.74
1. S1 28.29
2. S2 27.77
3. S3 27.32

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

GBP/USD back to 1.3250, down modestly for the day

GBP/USD now comes under fresh downside pressure and recedes toward the mid-1.3200s on Tuesday, partially reversing the optimism seen at the beginning of the week. Meanwhile, Cable’s bearish tone follows the resumption of the upside traction in the Greenback, always amid the sharp rally in USD/JPY.

EUR/USD looks inconclusive in the low 1.1400s

EUR/USD alternates gains with losses in the 1.1420 region in the latter part of the NA session on turnaround Tuesday. The pair’s vacillating price action comes amid the lack of clear direction in the US Dollar. Meanwhile, market participants are expected to gear up for the upcoming key releases on the US docket and developments from the ECB Forum in Sintra.

Gold clings to daily gains beyond $4,000

Following multi-month lows near $3,950, Gold now manages to regain some composure and reclaim the area beyond the key $4,000 yardstick per troy ounce on Wednesday. Still, any meaningful recovery appears limited as a broadly firmer US Dollar and rising US Treasury yields weigh on the yellow metal.

Coinbase, BlackRock, Visa and Stripe support Open Standard’s OUSD stablecoin

Open Standard on Tuesday unveiled Open USD (OUSD), a dollar-pegged stablecoin designed for global payments, backed by more than 140 companies. The founding coalition spans payment networks, banks, fintech firms, technology platforms and crypto infrastructure providers, including Shopify, Google, Ripple, Solana, Coinbase, Visa, Mastercard, Stripe, BlackRock and BNY.

Why a hawkish Bank of Japan could trigger the next Bitcoin sell-off

The Japanese Yen hits a 40-year low of 162.00 against the US Dollar, raising concerns about intervention or additional rate hikes by the Bank of Japan. BoJ may sell US Treasuries to buy back Yen, potentially pushing US bond yields higher and making Bitcoin less attractive to investors.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.