Article by: ETO Markets
Gold prices (XAU/USD) continue to consolidate below the $… level during the Wednesday Asian session, with traders exercising caution and awaiting Federal Reserve Chair Jerome Powell’s speech for clues on the Fed’s rate-cut path. Market focus also turns to the US Nonfarm Payrolls (NFP) report, which is expected to influence the Fed's monetary policy decisions and provide direction for the yellow metal. Recent upbeat US data, including a solid increase in job openings and a resilient labour market, suggests the Fed may adopt a cautious stance on rate cuts, supporting a modest rise in US Treasury yields and capping gold's upside. Nonetheless, geopolitical tensions, including Israel’s airstrikes and US President-elect Donald Trump’s tariff threats, continue to bolster gold's safe-haven appeal. Meanwhile, market participants weigh mixed signals from Fed officials, with the December rate cut remaining uncertain, though CME's FedWatch Tool reflects a 70% probability of a 25-basis point cut. Amid inflation concerns and restrictive rate policies, gold prices remain in a narrow trading range.
From a technical perspective, gold (XAU/USD) is experiencing a bearish consolidation phase following last week's decline, with a recent breakdown below a four-day ascending channel favouring bearish traders. Neutral oscillators on the daily chart indicate that a drop below the overnight swing low of $… may find support near $…. Further selling could expose the 100-day Simple Moving Average around $…, potentially leading to a retest of November's low near $…. On the upside, immediate resistance is expected at $… (55-day SMA), with subsequent hurdles at $…. A sustained move above $… psychological level could shift the bias toward bullish traders, paving the way for meaningful appreciation in the near term.
