Gold Price Forecast: XAU/USD corrects to near $2,040.00 despite USD Index holds losses, US job data eyed

Gold price has corrected to near $2,040.00 after printing a fresh all-time high at $2,079.76.
The USD Index is holding losses amid various headwinds such as renewed US banking crisis and debt ceiling issues.
US President Joe Biden is not interested in raising the debt ceiling at the cost of the President’s spending initiatives.

Sagar Dua FXStreet

Gold price has retreated sharply to near $2,040.00 in the Asian session after printing all-time highs of $2,079.76. The precious metal has corrected swiftly as profit-booking kicked in after solid gains inspired by changed language on interest rate guidance from the Federal Reserve (Fed) after hiking critical rates by consecutive 25 basis points (bps) to 5.00-5.25%.

The USD Index is making efforts to defend its immediate support of 101.07, however, the downside seems favored due to various headwinds. US banking jitters have renewed as Bloomberg reported that PacWest Bancorp is considering strategic options, including a potential sale.

While fears of debt ceiling issues are accelerating as US President Joe Biden is not interested in raising the debt ceiling in negotiations with Republicans at the cost of the President’s spending initiatives.

Meanwhile, S&P500 futures have shown some recovery indicating a recovery in the risk-off market mood. Accelerating fears of the US debt ceiling have weighed heavily on Treasury yields. The yields offered on 10-year US government bonds have dropped to near 3.33%.

Going forward, US labor market data will be keenly watched. As per the expectations, the US Nonfarm Payrolls (NFP) data is seen at 179K lower than the former release of 236K. The Unemployment Rate is seen steady at 3.5%. Also, Average Hourly Earnings are seen as stable. Consistent labor cost index data could force the Fed to re-consider a pause in the rate-hiking spell as it could fuel inflationary pressures.

Gold technical analysis

Gold price has corrected to near $2,040.00 after printing a fresh all-time high at $2,079.76. The precious metal has covered the gap made after the Fed policy on an intraday chart, which is acting as a cushion. Also, the 50-period Exponential Moving Average (EMA) at $2,038.56 is providing support to the Gold bulls. A recovery move above the 20-period EMA would support Gold bulls in reclaiming all-time highs.

The Relative Strength Index (RSI) (14) gauged support around 40.00 and is looking for a recovery.

Gold intraday chart

XAU/USD

Overview
Today last price	2041.02
Today Daily Change	2.10
Today Daily Change %	0.10
Today daily open	2038.92

Trends
Daily SMA20	2002.88
Daily SMA50	1944.39
Daily SMA100	1904.04
Daily SMA200	1811.78

Levels
Previous Daily High	2040.47
Previous Daily Low	2007.79
Previous Weekly High	2009.41
Previous Weekly Low	1974.13
Previous Monthly High	2048.75
Previous Monthly Low	1949.83
Daily Fibonacci 38.2%	2027.99
Daily Fibonacci 61.8%	2020.27
Daily Pivot Point S1	2017.65
Daily Pivot Point S2	1996.38
Daily Pivot Point S3	1984.97
Daily Pivot Point R1	2050.33
Daily Pivot Point R2	2061.74
Daily Pivot Point R3	2083.01

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.