Gold price outlook:
- gold price (XAU/USD) rebounded vigorously and reached its highest price since late December
- However, these gains could be at risk of reversing if the U.S. jobs report shows an unexpected rise next week.
- February U.S. non-farm payrolls report expected to be released Friday morning
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Gold prices (XAU/USD) have made impressive gains over the past week, breaking through key technical benchmarks and reaching their highest level since December 2023. By Friday’s close, the precious metal had registered a hefty 2.33% gain for the week, settling around $2,082.
Bullion’s bullish momentum is a reaction to two important economic reports that have caused investors to ponder the implications for the Federal Reserve’s monetary policy stance, as well as a gradual pullback in U.S. Treasury yields. This is thought to be one of the reasons.
First, the core PCE deflator for January was 0.4% month over month and 2.8% year over year, meeting consensus expectations. Wall Street, spooked by his recent CPI and PPI data and bracing for further upside to inflation expectations, was relieved when the FOMC-recommended price measure hit exactly the expected levels.
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Adding to the narrative was last month’s disappointing Manufacturing Purchasing Managers’ Index (ISM) showing an accelerating contraction and a further pullback in yields. Traders speculated that the U.S. central bank could begin easing policy sooner than initially expected due to weak factory output.
Looking ahead, traders should keep an eye on the upcoming February US jobs report for insight into the market’s trajectory. A blockbuster report reflecting strong January numbers could undermine expectations that the Fed will cut interest rates soon and send gold prices lower.
On the other hand, if non-farm payrolls come in weaker than expected, signaling stronger economic headwinds, interest rate expectations would likely be readjusted to a more dovish outlook, weighing on yields. This scenario is poised to support precious metals.
Upcoming US jobs report
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|
change |
long |
shorts |
OI |
| every day | -11% | 7% | -2% |
| weekly | -16% | twenty four% | 1% |
Gold price (XAU/USD) technical analysis
Gold surged past the $2,035 trendline resistance last week, breaking through another key ceiling at $2,065 and on the verge of surpassing late December’s swing high near $2,085. If the bears are unable to contain the price at this point, it could move towards a record for the yellow metal near $2,150.
Conversely, if the sellers stage a comeback and cause a bearish reversal, the first support will appear at $2,065. Further losses below this level could lead to a retracement towards the 50-day simple moving average at $2,035. If the weakness continues, all eyes will be on the $2,010/$2,005 range.
gold price technical chart
Gold price chart created using TradingView
