empty
06.09.2024 01:37 PM
XAU/USD. Analysis and Forecast

This image is no longer relevant

Amid the dovish sentiment surrounding the USD, driven by the Fed, the price of gold remains at its weekly high, around $2520.

This image is no longer relevant

However, the upward potential is limited as traders remain cautious ahead of the U.S. Nonfarm Payrolls (NFP) report. This critical employment release could influence market expectations for a more substantial interest rate cut by the Federal Reserve in September. This report will play a key role in driving demand for the U.S. dollar, potentially providing new momentum to the underperforming yellow metal.

Currently, markets are pricing in a 40% chance that the Fed will cut borrowing costs by 50 basis points at the monetary policy meeting scheduled for September 17-18. Such expectations emerged following a combination of positive and negative U.S. employment data released earlier this week.

In fact, Wednesday's report showed that the number of job openings in the U.S. dropped to a three-and-a-half-year low of 7.673 million in July. On Thursday, ADP (Automatic Data Processing) reported that private sector employment saw its smallest growth since January 2021, increasing by just 99,000 jobs in August.

Additionally, Chicago Federal Reserve President Austan Goolsbee stated that the long-term trend of inflation data and labor market conditions justifies easing interest rate policy in the near term. This has kept U.S. Treasury yields at their lowest level in more than a year and pushed the U.S. dollar away from the two-week high it reached on Tuesday. As a result, this backdrop provides some support for the precious metal. Therefore, even slight disappointment from the monthly U.S. employment data could negatively impact the U.S. dollar, paving the way for a significant rise in gold prices.

Conversely, the market reaction to a better-than-expected report is likely to be limited, given the prospects of an imminent Fed rate-cutting cycle. Nonetheless, gold remains on track for modest weekly gains, with the fundamental backdrop strongly favoring the bulls.

From a technical perspective, sustained strength above the $2525 resistance will confirm a short-term positive outlook. With the oscillators on the daily chart holding in positive territory and far from overbought levels, the precious metal will attempt to surpass the all-time high reached in August. A further upward move will pave the way for the resumption of the established uptrend observed over the past two months.

On the other hand, the psychological level of $2500 provides immediate support. A break below this level could push the price down to the horizontal support level of $2470. A convincing breach below the latter would set the stage for deeper losses, potentially targeting the 50-day Simple Moving Average (SMA) and heading toward the $2400 round level and the 100-day SMA.

This image is no longer relevant

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Irina Yanina
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

EUR/USD. Analysis and Forecast

Today, the EUR/USD pair is attempting to attract buyers. Despite the European Central Bank's decision on Thursday to leave interest rates unchanged, the euro is facing headwinds due to ongoing

Irina Yanina 13:20 2025-07-25 UTC+2

No Unity of Opinion Within the ECB Yet

Yesterday, the European Central Bank kept interest rates unchanged, citing risks stemming from the trade war with the U.S., the strong euro, and rising government spending. According to Governing Council

Jakub Novak 11:59 2025-07-25 UTC+2

ECB Leaves Rates Unchanged

Yesterday, many were watching how the European Central Bank would act under current conditions, as the economy still requires stimulus, but inflationary risks prevent further easing. Following the meeting, President

Jakub Novak 11:36 2025-07-25 UTC+2

The Market Has Chosen a Win-Win Strategy

The U.S. stock market has shaken off its fears completely. The VIX volatility index has plunged to its lowest level since early February, while the S&P

Marek Petkovich 11:15 2025-07-25 UTC+2

Will Trump Succeed in Forcing Powell to Do His Bidding? (Potential for a Bitcoin Decline and a Rise in #NDX)

The U.S. president is fully implementing his aggressive policy toward everyone and everything — both in foreign and domestic affairs. While his actions toward trade partners are more or less

Pati Gani 09:57 2025-07-25 UTC+2

What to Pay Attention to on July 25? A Breakdown of Fundamental Events for Beginners

There are relatively few macroeconomic reports scheduled for Friday, but all of them are quite important. In Germany, the IFO Business Climate Index will be released — the least significant

Paolo Greco 06:43 2025-07-25 UTC+2

GBP/USD Overview – July 25: No Sign of De-escalation Yet

On Thursday, the GBP/USD currency pair pulled back slightly, but this strengthening of the dollar has no real impact on the overall picture. The British pound has corrected in recent

Paolo Greco 04:17 2025-07-25 UTC+2

EUR/USD Overview – July 25: The ECB Meeting Did Not Change the Balance of Power Between the Dollar and the Euro

The EUR/USD currency pair continued to move upward on Thursday. There were several macroeconomic events scheduled for the day, and they did provoke a small market reaction

Paolo Greco 04:17 2025-07-25 UTC+2

EUR/USD: ECB's "Hawkish Pause" and Conflicting Macroeconomic Reports

The results of the ECB July meeting provided slight support for the euro. However, contradictory macroeconomic reports and anticipation of the outcome of the US-EU negotiations played a restraining role

Irina Manzenko 00:50 2025-07-25 UTC+2

The Euro Outsmarted the "Bears"

There was no "sell the fact" reaction. One of the reasons behind the recent EUR/USD rally was the expectation that the deposit rate would be held at 2% following

Marek Petkovich 00:50 2025-07-25 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.