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04.10.202415:04 Forex Analysis & Reviews: XAU/USD. Analysis and Forecast

Exchange Rates 04.10.2024 analysis

Gold lacks a clear direction ahead of U.S. NFP data, with Middle East tensions providing support.

Amid mixed fundamental signals, gold remains within a familiar range, established at the start of this week, as the market awaits new catalysts. The continued escalation of geopolitical tensions in the Middle East and the increasing risk of a broader conflict continue to support the precious metal as a safe-haven asset. However, diminishing chances of aggressive monetary easing by the Federal Reserve are keeping the U.S. dollar near its monthly high, reached yesterday. This limits the upward potential for gold, which tends to move inversely to the dollar.

Today we await the release of the U.S. monthly employment data, widely known as the Nonfarm Payrolls (NFP) report, to see a new phase of directional movement in gold prices. This report will influence the pace of Fed rate cuts and play a key role in driving demand for the U.S. dollar, potentially giving a significant boost to the commodity.

For now, the XAU/USD pair remains close to last week's all-time high and favors bullish momentum.

From a technical perspective, in light of the recent sharp rise in price toward the record high, the current range-bound movement can be considered a bullish consolidation phase. Furthermore, oscillators on the daily chart are comfortably holding in positive territory, having exited the overbought zone. This supports a bullish outlook, indicating that gold's most likely trajectory remains upward. At the same time, the $2672-$2673 area poses immediate resistance before the historical high at $2686, reached last week. Beyond that lies the round level of $2700. If successfully breached, the ground will be set for an extension of the multi-month uptrend.

On the other hand, the weekly low around $2623, which coincides with the breakout point of the upward channel resistance, now acts as support, serving as a key pivot point. A decisive break below this level will likely trigger strong technical selling pressure, pulling prices below the round level of $2,600 toward the next support at $2560. The corrective decline could extend further to the $2532 support before ultimately falling to the psychological level of $2500.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Irina Yanina,
Analytical expert of InstaSpot
© 2007-2024
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