The Fed kept interest rates steady. While the yield on US Treasury bonds rose to 3.45%, gold’s rise stopped at $2,326. Gains in the stock market have reduced gold’s safe-haven appeal. Gold traders are awaiting the important NFP report for future direction.
Federal Reserve’s impact on gold prices
The yellow metal started to rise after the Fed left interest rates constant. However, gold started to lose ground after reaching the $2,320 resistance on Thursday. The pullback came after the Federal Reserve said it would need stronger evidence that inflation was falling before considering interest rate cuts. With this statement, the yield of US Treasury bonds increased. Additionally, the 10-year bond yield rose to 3.45%. The buoyant mood in stock markets further reduced the appeal of gold as a safe haven.
cryptokoin.comAs you follow from , Fed Chairman Jerome Powell stated at the press conference that there will be no further interest rate increases in the near term, despite ongoing inflation concerns. Traditionally, gold thrives in a low interest rate environment as it increases the metal’s appeal against yield-generating assets. However, gold maintaining the $2,300 support level indicates a cautious approach among traders. It is possible that this will help gold prices stabilize for now.
Impact of economic data
The market’s focus now shifts to US economic data. In particular, the market will watch Friday’s Non-Farm Payrolls (NFP) data with great attention. Expectations are that there will be an employment increase of 250,000 people. Thursday’s economic reports, including Challenger Job Cuts and Initial Jobless Claims, which are expected to reflect continued labor market strength, also provide directional clues to traders.
Despite the overnight recovery, gold’s momentum was limited by expectations that US interest rates would remain high for longer. Spot gold traded around $2,300 after falling below $2,300 at the beginning of the week. The upcoming NFP report and other economic indicators will be critical in determining gold’s short-term price movements.
Gold prices technical view
Market analyst Arslan Ali interprets the technical picture of gold as follows. The precious metal is trading at $2,318.25 at the time of writing, down 0.17%. Currently, gold is just below the pivot point at $2,326.19. This indicates a slight downward trend in market sentiment. The nearest resistance levels are $2,352.13, $2,378.36, and $2,417.99. For gold, the trend must exceed these levels for it to start rising again. In contrast, support rests at $2,280.78, while more cushion exists at $2,243.84 and $2,212.02. Additionally, these emerge as potential grounds for price declines.
Technical indicators show that the 50-day Exponential Moving Average (EMA) is at $2,324.68 and is closely aligned with the pivot point, while the 200-day EMA at $2,282.56 is offering additional support just below current price levels. Gold needs to sustain a move above $2,326 to avoid downside pressure. It is possible that rising above this threshold could revive the upward trend. However, failure to hold above this will likely strengthen the bearish outlook.
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