Gold (XAU) Daily Forecast: Technical Levels to Watch as Gold Awaits NFP Breakout

Market Overview

Despite escalating tensions in the Middle East, gold (XAU/USD) has remained range-bound between $2,654 and $2,667, reflecting investor hesitation ahead of key economic data.

The primary factor limiting gold’s upward momentum is the strengthening US dollar, bolstered by a resilient labor market and diminishing prospects for aggressive Federal Reserve rate cuts.

“Traders are looking for a clearer direction, and all eyes are on the upcoming US employment report, which could serve as the next major catalyst for gold prices,” stated Mark Ashford, senior market analyst at Global Commodities. “The dollar’s strength has been a major headwind for gold.”

US Dollar Rises on Strong Labor Market Data

The US dollar has been gaining ground, nearing a one-month high, as recent economic indicators paint a picture of a stable labor market. According to the US Department of Labor, unemployment claims rose slightly to 225,000 for the week ending September 28, up from 218,000 in the prior week.

Meanwhile, private-sector employment saw an unexpected increase in job openings for August, reinforcing the strength of the US labor market.

Additionally, the Institute for Supply Management (ISM) reported that its Non-Manufacturing PMI rose to 54.9 in September, its highest reading since February 2023.

The robust labor market data has tempered expectations for significant Fed rate cuts, further supporting the US dollar and creating headwinds for non-yielding assets like gold.

Geopolitical Tensions Provide Limited Support for Gold Prices

While gold’s safe-haven appeal is being reinforced by the uncertain geopolitical landscape, this has not yet been enough to push prices higher. Hezbollah’s recent launch of 230 projectiles from Lebanon into Israel and retaliatory Israeli airstrikes have heightened the risk of a broader regional conflict.

This, coupled with Israel’s reported plans for a strong response to Iran’s missile launches, has led some investors to increase their gold holdings.

However, the market remains in a wait-and-see mode until clearer signals emerge from the upcoming Nonfarm Payrolls (NFP) report. With expectations of 140,000 new jobs and an unchanged unemployment rate of 4.2%, the NFP could significantly influence gold’s direction in the coming days.

Short-Term Forecast

Gold (XAU/USD) remains range-bound between $2,654 and $2,667, awaiting the Nonfarm Payrolls report. Strong dollar limits upside potential.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,663.92, up 0.27% for the session, maintaining bullish momentum above its pivot point of $2,660.33. The precious metal faces immediate resistance at $2,668.47, followed by $2,674.13 and $2,680.76. A sustained move above these levels could signal further upside.

On the downside, strong support is at $2,654.45, with additional levels at $2,648.24 and $2,640.75. The 50-day EMA at $2,654.56 and the 200-day EMA at $2,642.82 are both providing a solid base for the uptrend.

The recent symmetrical triangle breakout and formation of bullish engulfing candles suggest that Gold is poised for continued gains, as long as it stays above $2,660.