- Gold price retreats from four-month high, snaps three-day uptrend.
- Market’s consolidation ahead of the key US jobs reports probes XAU/USD bulls.
- IMF’s Georgieva cites recession risks to strengthen gold’s pullback moves.
- US NFP may renew the metal’s upside but $1,807 is the key hurdle to watch.
Gold price (XAU/USD) repeats the typical pre-NFP consolidation as it slides from a four-month high to $1,798 during early Friday. In doing so, the yellow metal prints the first daily loss in four amid cautious markets.
In addition to the anxiety ahead of the key US employment data, recent comments from International Monetary Fund (IMF) Managing Director Kristalina Georgieva also seemed to have probed the XAU/USD bulls amid sluggish trading hours. “Recession risks are rising for many countries, the outlook for global growth is exceptionally uncertain and dominated by risks,” said IMF’s Georgieva.
Additionally, fears surrounding the slowdown in the Initial Public Offering (IPO) markets could also be cited as a distant catalyst for the Gold price pullback. “A global slowdown in initial public offerings due to heightened market volatility and a regulatory cloud over new listings from China has created pent-up demand that could lead to an IPO boom in 2023, industry executives told the Reuters NEXT conference.”
Furthermore, the recent comments from New York Fed’s John Williams seemed to have tested the US Dollar bears, as well as favored Gold sellers, as the policymakers stated that the Fed has a ways to go with rate rises.
Amid these plays, the S&P 500 Futures drop 0.30% intraday to 4,070 whereas the US 10-year Treasury yields printed a corrective bounce off the 10-week low to 3.53% by the press time.
It’s worth noting, however, that the dovish concerns surrounding the US Federal Reserve’s (Fed) next move, backed by the downbeat Fedspeak and softer US data, seem to keep the gold bears hopeful ahead of the US employment. Forecasts suggest headline Nonfarm Payrolls (NFP) is likely to ease with a 200K print versus 261K prior while the Unemployment Rate could remain unchanged at 3.7%. It should be noted that a likely easing in the Average Hourly Earnings for the stated month could also weigh on the Gold price.
Technical analysis
Overbought conditions of the Relative Strength Index (RSI) line, placed at 14, triggered the Gold price retreat from a multi-day top. The pullback moves, however, remain elusive as the Moving Average Convergence and Divergence (MACD) indicator flashes bullish signals.
That said, the previous monthly top surrounding $1,787 restricts the immediate downside of the yellow metal ahead of highlighting the $1,757-55 support confluence including the 100-SMA and the resistance-turned-support line from November 15.
Following that, two-month-old horizontal support near $1,730 could act as the last defense of the Gold buyers.
Alternatively, an upward-sloping resistance line from early October joins the tops marked in August to highlight the $1,807 as the key hurdle to the north.
Gold price: Four-hour chart
Trend: Limited downside expected
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
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.