Gold prices rose after US labor market data came in softer than expected. Geopolitical tensions, neutral Fed bets and a weak US NFP report keep the gold price outlook optimistic.
Commerzbank: It will be difficult for gold to stay above $2,000!
Gold prices started to rise again before the US Federal Reserve’s interest rate meeting. According to Commerzbank economists, gold prices will have difficulty staying above $2,000. In this context, economists make the following assessment:
The possibility of the Fed raising interest rates has become slightly less likely. But it’s not completely off the table yet. So, assuming there is no escalation in the Middle East, gold will likely continue to struggle to climb above the $2,000 level permanently. Interest rate expectations could rise again quickly, which could put pressure on gold prices, especially if the U.S. economy proves persistently resilient.
Gold prices benefit from weak US data and geopolitical tensions
Gold made a consolidation breakout after the United States Bureau of Labor Statistics (BLS) reported that employment growth slowed in October. cryptokoin.comAs you follow from , US NFP was below expectations of 150 thousand to 180 thousand. It was also lower than the lower-revised 297K payroll addition in September. Meanwhile, the Unemployment Rate rose to 3.9%, contrary to expectations and the previously announced 3.8%.
Low labor force growth and slow wage gains have dampened bets on another Fed rate hike. Near-term demand for gold has strengthened further due to ongoing geopolitical tensions in the Middle East and expectations that the Fed will keep interest rates higher for longer and employment growth will slow in October. This was supportive for gold prices.
Gold prices aim to stabilize above $2,000
Market analyst Sagar Dua interprets the technical picture of gold as follows. The gold price is trying to reach the psychological resistance of $ 2,000.00 by breaking the consolidation in the range of $ 1,975-1,990 after the release of US labor market data. Expectations were also for a fluctuating movement in gold following the US labor market data. From a broader perspective, the trend is bullish for gold as the 20-day and 50-day Exponential Moving Averages (EMAs) are sloping higher. Momentum indicators also remain in the upward range. Therefore, it indicates strength in upward momentum.
Gold price technical analysis
Market analyst Dhwani Mehta explains what he sees in the technical picture of gold as follows. Gold prices remained below the $2,000 level despite finding new demand on Thursday. Currently several ‘Bullish Crosses’ are ongoing. Additionally, the 14-day Relative Strength Index (RSI) indicator is trading just below the overbought zone. Therefore, the outlook for gold remains bullish. Meanwhile, the 21-day Simple Moving Average (SMA) has moved above all major SMAs. Thus confirming the multiple Bullish Cross from earlier this week.
If the recovery in gold prices gains momentum, there will be immediate resistance at Wednesday’s high of $1,993. Above this, it will retest the $2,000 threshold. Acceptance above the multi-month high of $2,009 will be critical for the revival of the uptrend towards the mid-May high of $2,020. On the downside, strong support awaits at $1,970, Wednesday’s low. If it fails to show resistance above this level, it will target the static support at $1,963. Moreover, it will open the way to the psychological level of $1,950.
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