GOLD could stage a rebound if key $4,070 support holds
Gold retakes $4,100 early Monday, snapping a two-day pullback from three-week highs.
US Dollar firms up amid reduced December Fed rate cut bets, awaits US NFP release on Thursday.
Gold defends critical support zone near $4,070 on the daily chart, while RSI stays bullish.
Gold is looking to build the recovery momentum above the $4,100 mark amid a cautious start to a new week, filled with key US economic releases, including the critical September NFP due on Thursday.
Gold finds fresh buyers early Monday, following two back-to-back days of losses, fuelled by diminishing odds that the US Federal Reserve will lower interest rates next month.Markets are currently pricing in a 46% probability of such a move, the CME Group’s FedWatch Tool shows, down from about 67% seen a week ago.
Amid elevated inflation and weak private sector employment data from the US, Fed officials struck a cautious tone, pushing back against expectations of further easing in December, still weighing the impact of the recent two rate cuts.
This hawkish narrative weighed heavily on Gold, fuelling a late pullback from three-week highs of $4,245. Despite the corrective decline, Gold managed to eke out gains over the week.
The Bureau of Labor Statistics said on Friday that the September jobs report will be released on Thursday, leading to the end of a 43-day dry spell of data publication.
Traders now look to take profits off the table on their recent Gold short positions, bracing for a spate of missed data flow, which could provide clarity on the health of the US economy and the Fed’s path forward on interest rates.
However, any upside attempts in Gold will likely be capped by persistent US Dollar strength against the Japanese Yen and the Pound Sterling as both Japan and the UK face fiscal challenges.
Additionally, reduced physical demand for the bright metal from Asia will continue to act as a headwind. According to Reuters, elevated prices curtailed buying activity in Asia, with discounts in India reaching their highest level in five months.
Daily technical analysis
In the daily chart, XAU/USD trades at $4,088.10. The 21-day SMA has started to soften at $4,066.78 after a strong run, while the 50-, 100- and 200-day SMAs continue to rise. Short-term averages remain stacked above the longer ones, and price holds above all of them, suggesting buyers retain control. The 14-day RSI sits at 54 (neutral), maintaining a modest positive tone above its midline.
Measured from the $4,381.17 high to the $3,885.84 low, the Fibonacci framework shows the 38.2% retracement at $4,075.05 reclaimed, putting the 50% retracement at $4,133.50 in focus as the next resistance. A daily close above that barrier would open the way toward a deeper recovery, while failure to extend gains would keep consolidation risks in play above the 21-day SMA as initial dynamic support and leave the broader uptrend bias intact.
GOLD could stage a rebound if key $4,070 support holds
Gold is looking to build the recovery momentum above the $4,100 mark amid a cautious start to a new week, filled with key US economic releases, including the critical September NFP due on Thursday.
Gold finds fresh buyers early Monday, following two back-to-back days of losses, fuelled by diminishing odds that the US Federal Reserve will lower interest rates next month.Markets are currently pricing in a 46% probability of such a move, the CME Group’s FedWatch Tool shows, down from about 67% seen a week ago.
Amid elevated inflation and weak private sector employment data from the US, Fed officials struck a cautious tone, pushing back against expectations of further easing in December, still weighing the impact of the recent two rate cuts.
This hawkish narrative weighed heavily on Gold, fuelling a late pullback from three-week highs of $4,245. Despite the corrective decline, Gold managed to eke out gains over the week.
The Bureau of Labor Statistics said on Friday that the September jobs report will be released on Thursday, leading to the end of a 43-day dry spell of data publication.
Traders now look to take profits off the table on their recent Gold short positions, bracing for a spate of missed data flow, which could provide clarity on the health of the US economy and the Fed’s path forward on interest rates.
However, any upside attempts in Gold will likely be capped by persistent US Dollar strength against the Japanese Yen and the Pound Sterling as both Japan and the UK face fiscal challenges.
Additionally, reduced physical demand for the bright metal from Asia will continue to act as a headwind. According to Reuters, elevated prices curtailed buying activity in Asia, with discounts in India reaching their highest level in five months.
Daily technical analysis
In the daily chart, XAU/USD trades at $4,088.10. The 21-day SMA has started to soften at $4,066.78 after a strong run, while the 50-, 100- and 200-day SMAs continue to rise. Short-term averages remain stacked above the longer ones, and price holds above all of them, suggesting buyers retain control. The 14-day RSI sits at 54 (neutral), maintaining a modest positive tone above its midline.
Measured from the $4,381.17 high to the $3,885.84 low, the Fibonacci framework shows the 38.2% retracement at $4,075.05 reclaimed, putting the 50% retracement at $4,133.50 in focus as the next resistance. A daily close above that barrier would open the way toward a deeper recovery, while failure to extend gains would keep consolidation risks in play above the 21-day SMA as initial dynamic support and leave the broader uptrend bias intact.
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