Gold Price Forecast: NFP Anticipation and Hawkish Fed Impact on $2,275 Level
The gold price (XAU/USD) continued its downward trend, trading around the $2,275 mark, influenced by hawkish comments
The gold price (XAU/USD) continued its downward trend, trading around the $2,275 mark, influenced by hawkish comments from Federal Reserve officials, which strengthened the US dollar and weighed on gold prices. The ongoing global tensions might mitigate further declines in gold prices.
Traders are cautious, awaiting the US Nonfarm Payrolls (NFP) data release, expected later in the North American session.
Market Dynamics Affecting Gold Prices
In the United States, Fed officials expressed caution over immediate interest rate reductions, prompting some investors to liquidate gold investments for profit, thus lowering gold prices.
Richmond Fed President Thomas Barkin hinted at a readiness to cut rates with sustained inflation improvement, while Minneapolis Fed Bank President Neel Kashkari mentioned the possibility of two rate cuts within the year, contingent on stable inflation.
This cautious stance, perceived as hawkish, has kept US Treasury yields elevated, bolstering the US dollar and exerting downward pressure on gold.
Investors are now keenly awaiting the US employment report, anticipated to report a job increase of 200,000 in March, a decrease from February’s 275,000, with the unemployment rate expected to remain at 3.9%.
The upcoming Average Hourly Earnings figures will further shape the anticipated trajectory of Federal Reserve rate cuts, affecting the US dollar and the broader commodity market.
Geopolitical Developments and Gold’s Safe-Haven Status
Geopolitical risks, such as increasing tensions in the Middle East, particularly with growing concerns over potential Iranian retaliation against Israel, and the ongoing conflict between Russia and Ukraine, along with a significant earthquake in Taiwan, have negatively impacted market sentiment.
These factors are likely to enhance gold’s (XAU/USD) attractiveness as a safe-haven asset, driving investors towards it amid the market’s instability.
Hence, escalating geopolitical tensions and global disturbances are prompting investors to gravitate towards secure assets like gold, seeking safety against financial market uncertainties and instabilities.
Gold Price Forecast: Technical Outlook
Gold (XAU/USD) is trading at $2,292.18, showing little change as markets anticipate the upcoming Nonfarm Payrolls (NFP) data. The asset hovers around the pivot point of $2,286.10, with a bullish sentiment prevailing above this mark. A drop below could trigger a sharp sell-off.
Resistance levels are mapped at $2,305.37, $2,322.15, and $2,336.62, while support levels are established at $2,268.25, $2,251.12, and $2,234.70.
The Relative Strength Index (RSI) at 55 suggests moderate momentum, and the 50-day Exponential Moving Average (EMA) at $2,272.92 indicates underlying support.
Investors should watch these technical thresholds closely, as breaking through them could signal significant price movements in either direction.
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