|

Gold price stands firm near daily top, around $2,640 area ahead of US NFP report

  • Gold price stages a goodish recovery from over a one-week low touched earlier this Friday.
  • A softer risk tone, geopolitical risks, and trade war fears benefit the safe-haven commodity.
  • Bets for a less dovish Fed cap gains for the XAU/USD ahead of the crucial US NFP report.

Gold price (XAU/USD) struggles to capitalize on its goodish intraday bounce from a one-and-half-week low touched earlier this Friday, though it manages to stick to modest gains through the first half of the European session. The US Treasury bond yields remain suppressed amid bets that the Federal Reserve (Fed) will lower borrowing costs in December. This, in turn, keeps the US Dollar (USD) near a multi-week low and acts as a tailwind for the non-yielding yellow metal. 

Apart from this, a slight deterioration in the global risk sentiment, geopolitical tensions and trade war fears turn out to be other factors underpinning the safe-haven Gold price. That said, expectations for a less dovish Fed, bolstered by hopes that US President-elect Donald Trump's policies will boost inflation, keep a lid on any further gains for the XAU/USD. Traders also seem reluctant to place aggressive directional bets ahead of the release of the US Nonfarm Payrolls (NFP) report. 

Gold price traders await Fed rate cut before placing directional bets

  • The recent remarks from several influential FOMC members, including Federal Reserve Chair Jerome Powell on Wednesday, suggested that the US central bank could pause its rate-cutting cycle.
  • This, in turn, drags the non-yielding Gold price to over a one-week low on Friday, though a combination of factors offers some support to the bullion and helps limit any further depreciating move. 
  • Russia has shown no sign of fatigue in a nearly two-year-old conflict with Ukraine and pounded the country’s east during the past week with long-range weapons and sustained ground assaults. 
  • Concerns about US President-elect Donald Trump's trade tariffs and their effect on the global economic outlook temper investors' appetite for riskier assets and lend support to the safe-haven XAU/USD. 
  • According to the CME Group's FedWatch Tool, traders are pricing in a 70% chance that the Fed will lower borrowing costs by 25 basis points at the December meeting and a 30% probability of a pause. 
  • Rate cuts bets held broadly steady after the US Department of Labor (DoL) reported on Thursday that Initial Jobless Claims rose to 224K for the week ended November 29, from 215K in the previous week. 
  • The benchmark 10-year US Treasury yield languishes near its lowest level since October 22 and keeps the US Dollar depressed near a multi-week low, offering additional support to the precious metal.
  • Investors keenly await the release of the US Nonfarm Payrolls (NFP) report, which might offer cues about the Fed's rate-cut path and determine the near-term trajectory for the USD and the commodity. 

Gold price short-term technical setup seems tilted in favor of bears

fxsoriginal

From a technical perspective, an intraday breakdown below the 100-period Simple Moving Average (SMA) on the 4-hour chart and a short-term trading range support near the $2,633-2,632 area was seen as a key trigger for bearish traders. The subsequent swift recovery, however, warrants some caution before positioning for any further losses. Meanwhile, any further move up is likely to confront some resistance near the $2,649 region ahead of the $2,655 supply zone. Some follow-through buying beyond last Friday's swing high, around the $2,666 area will shift the bias in favor of bulls and allow the Gold price to reclaim the $2,700 mark.

On the flip side, the Asian session low, around the $2,614-2,613 region, now seems to act as immediate strong support ahead of the $2,605-2,600 area. This is followed by the 100-day SMA, currently around the $2,583 zone, below which the Gold price could slide to the November monthly swing low, around the $2,537-2,536 area. The downward trajectory could extend further and eventually drag the XAU/USD to the $2,500 psychological mark.

US Dollar PRICE Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.

 USDEURGBPJPYCADAUDNZDCHF
USD -0.03%-0.14%0.18%-0.00%0.33%0.53%-0.02%
EUR0.03% -0.11%0.21%0.03%0.36%0.57%0.00%
GBP0.14%0.11% 0.29%0.14%0.49%0.68%0.14%
JPY-0.18%-0.21%-0.29% -0.16%0.17%0.36%-0.16%
CAD0.00%-0.03%-0.14%0.16% 0.34%0.54%0.00%
AUD-0.33%-0.36%-0.49%-0.17%-0.34% 0.20%-0.36%
NZD-0.53%-0.57%-0.68%-0.36%-0.54%-0.20% -0.54%
CHF0.02%-0.01%-0.14%0.16%-0.01%0.36%0.54% 

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD rebounds after falling toward 1.1700

EUR/USD gains traction and trades above 1.1730 in the American session, looking to end the week virtually unchanged. The bullish opening in Wall Street makes it difficult for the US Dollar to preserve its recovery momentum and helps the pair rebound heading into the weekend.

GBP/USD steadies below 1.3400 as traders assess BoE policy outlook

Following Thursday's volatile session, GBP/USD moves sideways below 1.3400 on Friday. Investors reassess the Bank of England's policy oıtlook after the MPC decided to cut the interest rate by 25 bps by a slim margin. Meanwhile, the improving risk mood helps the pair hold its ground.

Gold stays below $4,350, looks to post small weekly gains

Gold struggles to gather recovery momentum and stays below $4,350 in the second half of the day on Friday, as the benchmark 10-year US Treasury bond yield edges higher. Nevertheless, the precious metal remains on track to end the week with modest gains as markets gear up for the holiday season.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid bearish market conditions

Bitcoin (BTC) is edging higher, trading above $88,000 at the time of writing on Monday. Altcoins, including Ethereum (ETH) and Ripple (XRP), are following in BTC’s footsteps, experiencing relief rebounds following a volatile week.

How much can one month of soft inflation change the Fed’s mind?

One month of softer inflation data is rarely enough to shift Federal Reserve policy on its own, but in a market highly sensitive to every data point, even a single reading can reshape expectations. November’s inflation report offered a welcome sign of cooling price pressures. 

XRP rebounds amid ETF inflows and declining retail demand demand

XRP rebounds as bulls target a short-term breakout above $2.00 on Friday. XRP ETFs record the highest inflow since December 8, signaling growing institutional appetite.