Market Analysis

Gold price maintains slight gains close to the weekly high, while bulls are uncommitted ahead of the US NFP

Amos Simanungkalit · 04 Oct 2024231.7K Views

Gold prices (XAU/USD) struggle to maintain momentum from their modest intraday rise, remaining below the weekly high during the early European session on Friday. Reduced expectations for a more aggressive rate cut by the Federal Reserve (Fed) act as a major headwind for the non-yielding precious metal. Additionally, traders are cautious, awaiting the release of the highly-anticipated US monthly employment report before making directional moves.

Ahead of this key data, some traders are adjusting positions, leading to a slight pullback in the US Dollar (USD) from its one-month high reached on Thursday, which provides some support for gold. Moreover, persistent risks related to ongoing Middle East conflicts are adding to the safe-haven appeal of gold. As a result, the overall bias for XAU/USD remains upward, keeping it within reach of last week’s record peak.

Technical Outlook: Gold poised for further gains, $2,625 area remains pivotal

From a technical standpoint, the current sideways movement could be seen as a bullish consolidation following the strong rally that took gold to its record high. Additionally, daily chart oscillators are holding in positive territory and have eased from overbought levels, which supports the bullish outlook. The path of least resistance for gold seems to point upward. In the near term, the $2,672-$2,673 range could serve as initial resistance, followed by the $2,685-$2,686 zone, near last week’s all-time high. A break above the $2,700 level could confirm the continuation of the well-established uptrend.

Conversely, support is expected around the weekly low near $2,625-$2,624, which aligns with a short-term ascending channel’s previous resistance level. A decisive break below this level could trigger increased selling pressure, pushing gold below $2,600 toward the next significant support around $2,560. If the corrective move deepens, further declines toward the $2,535-$2,530 region are possible, with a potential drop to the psychological $2,500 mark.