Gold (XAU) Price Forecast: Strong NFP Data Could Confirm Thursday’s Bearish Reversal

Gold Holds Steady Ahead of U.S. Jobs Report as Reversal Signals Loom

Gold futures were steady on Friday following a volatile session, with traders eyeing the U.S. nonfarm payrolls (NFP) report for signals on the Federal Reserve’s interest rate path. On Thursday, gold posted a closing price reversal, suggesting a near-term correction might be underway. Gold is trading at around $2,747 per ounce, near last week’s close, a key level that could indicate a broader trend shift if broken.

At 11:34 GMT, XAU/USD is trading $2753.03, up $9.09 or +0.33%.

Potential Bearish Signals in Gold Futures

Gold’s recent price reversal could trigger a short-term correction, with a break below $2,731.63 likely confirming this bearish chart pattern. If the reversal plays out, we expect gold to test the $2,708.76–$2,697.28 support zone over the next few sessions. A decisive break below this range could accelerate selling toward the 50-day moving average of $2,624.71. Conversely, if prices push above the recent high of $2,790.17, this would negate the reversal, resuming the broader uptrend and supporting gold’s bullish momentum.

Gold Recovers on Profit-Taking and Election-Driven Demand

After profit-taking hit the market on Thursday, pushing gold 1.5% lower, prices rebounded as investors awaited economic insights from the U.S. jobs data. Despite the recent pullback, gold remains up 4% in October as uncertainty ahead of the Nov. 5 U.S. presidential election sustains demand for safe-haven assets.

Traders have kept a close watch on political and economic indicators, with the gold market responsive to any shifts in polling between Donald Trump and Kamala Harris, as the race tightens. Additionally, Citi projects gold may reach $3,000 per ounce within six months, citing labor market concerns and sustained ETF inflows as key drivers.

Dollar, Treasury Yields Stable Before Jobs Data Release

The U.S. dollar held steady on Friday, supported by a series of economic data suggesting robust underlying economic conditions despite anticipated Fed rate cuts.

The October NFP report is expected to show an increase of roughly 100,000 jobs, a slowdown from September’s 254,000 figure. Analysts, however, caution that external factors, such as recent hurricanes, could weigh on the numbers.

Treasury yields were flat, with markets largely pricing in a 25-basis-point rate cut at the Fed’s November meeting. Dollar strength remains a central theme, supported by reduced expectations for aggressive rate cuts.

Weakening Physical Demand in Asia as High Prices Deter Buyers

While gold prices rally, physical demand in key Asian markets has softened. In China, consumption has dropped 11% year-to-date, and in India, buyers are turning to coins and bars, as rising making charges deter jewelry purchases. This trend marks a shift from past years when jewelry demand was more resilient to price increases, signaling that high prices are beginning to strain end-user demand.

Market Forecast: Bearish Potential with Key Level at $2,731.63

In the short term, traders should closely watch the $2,731.63 level, as a break below this could confirm the recent reversal pattern, signaling potential for a 2-3 day correction. Holding above this level, however, would support consolidation within the current uptrend, with $2,790.17 as the resistance to watch for renewed bullish momentum.

Longer-term bullish factors remain in play, including election uncertainty, potential Fed rate cuts, and inflation pressures, all of which could provide sustained support for gold in the coming months.