GOLD Analysis
Afternoon: Gold Prices Dip Amid Focus on U.S. Payrolls Data and Fed’s Potential Rate Cut
Highlights:
- Gold prices dipped as investors await U.S. payroll data to assess the Fed's rate cut decision.
- U.S. services sector grew, but employment data indicates a softening labor market.
- Key support for gold is at $2,638, with a buying opportunity around $2,650 targeting $2,672.
Overview:
Gold prices experienced a modest decline this week as investors await crucial U.S. payrolls data to gauge the Federal Reserve's upcoming monetary policy decisions. Despite the ongoing geopolitical tensions and the global safe-haven appeal of gold, the precious metal’s movements are currently driven by expectations around the Federal Reserve’s interest rate cut, which is anticipated in the coming month.
Recent U.S. economic data presents a mixed picture. While the U.S. services sector saw activity reach a 1-1/2-year high in September due to a surge in new orders, a significant drop in employment within the sector signals a softening labor market. This was reinforced by a slight increase in initial jobless claims, with more Americans filing for unemployment benefits than anticipated. These signs of a cooling job market may influence the Federal Reserve’s decision to cut interest rates in November, which would likely benefit gold prices.
Technically, gold prices are currently trading between key support at $2,638 and resistance at $2,682. A drop toward $2,650 could present a buying opportunity, targeting $2,672 with a stop-loss just below $2,638.
Key Takeaways:
- U.S. payroll data is critical for gold’s near-term outlook.
- Federal Reserve’s expected interest rate cut could support gold’s price recovery.
Action Plan:
Buy around $2,650 with a target of $2,672 and stop-loss below $2,638.
Support and Resistance Levels:
