Gold price flirts with daily low around $2,650, downside seems limited amid MidEast tensions

Gold price (XAU/USD) attracts sellers for the second straight day on Thursday and remains depressed through the early part of the European session, though the downside remains cushioned. The upbeat US ADP report released on Wednesday pointed to the underlying stability in the labor market and forced investors to further scale back their bets for another oversized rate cut by the Federal Reserve (Fed) in November. This assists the US Dollar (USD) to build on this week's goodish rebound from its lowest level since July 2023 and climb to a three-week high, which, in turn, is seen undermining the non-yielding yellow metal.

That said, the risk of a further escalation of geopolitical tension in the Middle East might continue to offer some support to the Gold price. Iran launched over 200 ballistic missiles at Israel on Tuesday, while the latter conducted a precise air strike and bombed central Beirut in Lebanon during the early hours of Thursday. This raises the risk of a full-blown war in the region and tempers investors' appetite for riskier assets, which is evident from a weaker tone around the equity markets and in turn, could benefit the traditional safe-haven XAU/USD. This makes it prudent to wait for strong follow-through selling before placing fresh bearish bets. 

Daily Digest Market Movers: Gold price keeps the red amid stronger USD, geopolitical risks to limit losses

• The incoming stronger US labor market reports and the Federal Reserve Chair Jerome Powell's relatively hawkish remarks on Monday assist the US Dollar in prolonging its recovery move from the lowest level since July 2023.
• The US JOLTS Job Openings survey published on Tuesday showed that the number of available jobs unexpectedly jumped by 329K from an upwardly revised 7.711 million in the previous month to 8.040 million in August. 
• Furthermore, Automatic Data Processing (ADP) reported on Wednesday that private-sector employers added 143K jobs in September against expectations for a rise of 120K and August's upwardly revised reading of 103K.
• This provided evidence of a still resilient US labor market and forced investors to reassess the likelihood of another 50-basis points interest rate cut by the US central bank at its next monetary policy meeting in November.
• Adding to this hopes that China's massive stimulus measures will ignite a lasting recovery in the world's second-largest economy and further act as a headwind for the safe-haven Gold price on Thursday.
• On the geopolitical front, an Israeli strike on central Beirut, Lebanon, early this Thursday comes after Iran fired more than 180 ballistic missiles at Israel on Tuesday, raising the risk of a full-out war in the Middle East. 
• The mixed fundamental backdrop warrants some caution before placing aggressive directional bets around the XAU/USD ahead of important US macro data, including the closely-watched Nonfarm Payrolls report on Friday.
• In the meantime, Thursday's US economic docket – featuring Initial Jobless Claims and ISM Services PMI – and speeches by influential FOMC members might produce short-term opportunities around the precious metal. 

Technical Outlook: Gold price needs to break below $2,625-2,624 support for bears to seize near-term control

From a technical perspective, the range-bound price action since the beginning of this week comes on the back of the recent strong rally to a record high and might still be categorized as a bullish consolidation phase. Moreover, oscillators on the daily chart are holding comfortably in positive territory and have also eased from the overbought zone. This, in turn, favors bullish traders and suggests that the path of least resistance for the Gold price remains to the upside. Meanwhile, the $2,672-$2,673 area might continue to offer immediate resistance ahead of the $2,685-2,686 zone, or the all-time peak touched last week. This is closely followed by the $2,700 mark, which if conquered will be seen as a fresh trigger for bulls and set the stage for an extension of a well-established multi-month-old uptrend.

On the flip side, the weekly low, around the $2,625-2,624 area, which coincides with a short-term ascending channel resistance breakpoint, might continue to offer support and act as a key pivotal point. A convincing break below might prompt aggressive technical selling and drag the Gold price below the $2,600 mark, towards the next relevant support near the $2,560 zone. The corrective decline could extend further towards the $2,535-2,530 support before the XAU/USD eventually drops to the $2,500 psychological mark.