Gold prices are holding steady below the one-month high of $2,678 reached last Thursday, as traders wait for the US Nonfarm Payrolls (NFP) report to determine the next move in the market.
Market Focus Shifts to US NFP Report
Despite the ongoing strength of the US Dollar and rising Treasury bond yields, gold remains supported by a surge in safe-haven demand. Concerns about inflation, fueled by the potential impact of incoming trade and immigration policies from President-elect Donald Trump, have increased gold’s appeal as both an inflation hedge and a traditional safe-haven asset.
Technical Indicators Present Mixed Signals
Gold’s price continues to consolidate its gains for the week, hovering just below Thursday’s high. The 14-day Relative Strength Index (RSI), which currently sits at 57.50, suggests continued upward momentum. Furthermore, gold closed above the key resistance level of $2,665 on Tuesday.
However, caution is warranted as the 21-day Simple Moving Average (SMA) crossed below the 100-day SMA, forming a bearish crossover on Thursday. This technical shift could signal a potential pullback, despite the overall bullish sentiment.
What to Expect from US NFP Report
The upcoming NFP data could dictate gold’s direction. Should the report fall short of expectations, gold may extend its recent four-day rally, possibly testing the $2,693 mark, which would push it above last week’s high. Further upside could challenge the $2,700 level and December’s peak of $2,726.
On the other hand, a strong payrolls report could lead to renewed selling pressure on gold, sending prices toward the 50-day SMA at $2,643. A drop below this level could bring the confluence of the 21-day and 100-day SMAs at $2,633 into focus. The key support level for buyers remains at the January 6 low of $2,615.
As traders await the NFP report, the gold market’s short-term trajectory hinges on the outcome of this critical economic data.
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