Gold Price Forecast: XAU/USD to see subdued movements awaiting NFP on Friday

FXStreet Insights Team FXStreet

Gold price continues to enjoy good two-way price movements while holding at the higher end of this week’s trading range. In the view of FXStreet’s Haresh Menghani, XAU/USD is going nowhere as investors seem reluctant ahead of Friday’s release of the US monthly jobs report.

See – Gold Price Forecast: XAU/USD to see further gains above the $1835 zone – Commerzbank

Dovish Fed expectations continue to act as a tailwind for XAU/USD

“The closely-watched NFP report might provide fresh clues on when the Fed could begin rolling back its massive pandemic-era stimulus. This, in turn, will play a key role in determining the next leg of a directional move for the non-yielding yellow metal.”

“It is prudent to wait for a sustained move beyond the weekly trading range hurdle, around the $1,823 area, before positioning for any further appreciating move. The momentum could then lift XAU/USD towards a key barrier near the $1,832-34 region, which if cleared decisively will reaffirm the bullish breakout and pave the way for additional gains. Gold might then accelerate the momentum towards the next relevant resistance, around the $1,853-55 zone.”

“The weekly swing lows, around the $1,800 figure, now seems to protect the immediate downside. A sustained break below might prompt some technical selling and drag XAU/USD back towards the $1,778-74 zone. Some follow-through weakness will shift the bias in favour of bearish traders and expose the $1,762 support zone, which is followed by the $1,751-50 region. The downward trajectory could further get extended towards the $1,730 area en-route the $1,700 mark and multi-month swing lows, around the $1,687-86 region.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD breaks below 0.7000 ahead of inflation data

AUD/USD has accelerated its downward trend on Tuesday, breaching below the key 0.7000 yardstick ahead of the opening bell in Asia on Wednesday. Indeed, spot has retreated for the second day in a row despite the hawkish hike by the RBA early on Tuesday and in response to the continuation of the move higher in the Greenback. Looking ahead, all the attention will be on the release of Australia’s inflation data on Wednesday.

USD/JPY consolidates near 157.50 as a bullish USD counters intervention risks

USD/JPY struggles to capitalize on the overnight bounce from a one-week low, consolidating around 157.50 in the Asian session on Tuesday. Trump's concerns about the Japanese Yen's weakness fueled speculation about another US-Japan joint intervention. This, along with the hawkish BoJ, underpins the JPY and caps the currency pair. Meanwhile, rising Fed rate-hike bets and oil-driven inflation fears continue to push US bond yields to multi-year highs, keeping the US Dollar pinned near a two-month high and supporting the pair.

Gold trims gains; back toward $4,150

Gold now surrenders some of its initial advance and retests the $4,150 zone per troy ounce on Tuesday. Meanwhile, the move higher in the yellow metal comes despite the firmer US Dollar and rising US Treasury yields across the board, while escalating geopolitical tensions appear to limit the downside potential.

XRP advances within a robust technical structure

Ripple (XRP) shows signs of stabilizing after reclaiming support at $1.50 on Tuesday. A robust technical structure underpins the token’s short to medium-term bullish outlook. Still, XRP is not out of the woods yet, as profit-taking and buyer exhaustion could weigh on price action and extend the recent correction from September highs around $1.66.

RBA recap: Rate hikes are on the table as demand stays too strong

The Reserve Bank of Australia unanimously tightened monetary policy, warning that inflation remained too high and that several upside risks had begun to materialise. Governor Michele Bullock said the Board would raise rates again if necessary.

Silver is more volatile than Gold ahead of PCE and NFP. This chart shows the positioning gap

The market’s attention is focused on American data this week, but there’s something only those with a trained eye may be looking at: Gold and Silver positioning gap. Financial markets are moving on fears, mostly related to persistently high energy prices driven by the Middle East war. Sure, the US Dollar (USD) is strong, but at what cost?