![](https://blog.trive.co.za/wp-content/uploads/2023/12/inv-1024-x-512-px-24.png)
Gold prices (XAUUSD) remain relatively stable as investors gear up for the highly anticipated US Nonfarm Payrolls report, scheduled for release today at 13:30 GMT. This crucial data will provide insights into the strength of the US labour market, influencing the Federal Reserve’s policy decisions and ultimately impacting gold’s trajectory.
Despite facing a slight dip this week, gold retains support above the $2,009 per ounce level. Market sentiment remains bullish in the wake of recent data suggesting a gradual cooling in the US labour market. Notably, ADP’s employment change report and JOLTS data pointed towards lower-than-expected job growth and declining job openings in October. Additionally, weekly jobless claims came in lower than anticipated.
Markets are currently pricing in a 59% chance of a US rate cut by March, fuelling gold’s upward momentum. This anticipation, coupled with a weaker dollar, has been a significant driver of gold’s recent rally.
Technical Analysis:
On the 4-hour chart, gold is currently trading sideways below the ascending channel trading pattern, awaiting the NFP report. The price action is currently above the 20-SMA (green line) and 100-SMA (orange line) but trades below the 50-SMA (blue line). The 20-SMA recently broke below the upward-sloping 50-SMA, indicating a potential shift in short-term momentum. The RSI is flat, suggesting indecisiveness among traders.
A stronger-than-expected NFP report could boost the dollar and trigger a short-term pullback in gold price. Short-term traders could look for opportunities to sell towards the initial support level at $2,016.15/ounce should the bears sustain a push below the 20-SMA. A break below this level could bring the $2,005.66/ounce and $1,988.83/ounce support levels into play.
A weaker-than-expected NFP report could weaken the dollar and fuel a breakout for gold. Short-term traders could look for opportunities to buy towards the resistance level at $2,039.56/ounce should the bulls sustain a push above the 50-SMA. A break above this level could confirm the bullish momentum, likely bringing the $2,052.00/ounce and $2,068.13/ounce resistance levels within reach.
![](https://blog.trive.co.za/wp-content/uploads/2023/12/image-48-1024x540.png)
Summary:
The near-term direction of gold prices hinges on the outcome of the US Nonfarm Payrolls report. A strong report could trigger a pullback, while a weak report could pave the way for further gains.
The $2,039.56/ounce resistance level and $2,016.15/ounce support level could act as key levels in the gold’s short-term direction.
Sources: TradingView, Trading Economics, Reuters, Dow Jones Newswire.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change, which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.