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GOLD PRICE OUTLOOK:
- Gold prices (XAU/American dollar) rebound vigorously and reach their highest level since the end of December
- However, these gains could be at risk of reversing next week if US jobs data surprises to the upside.
- The US Nonfarm Payrolls report for February will be released on Friday morning.
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Gold (XAU/USD) prices staged a notable rally last week, surpassing key technical thresholds to hit their highest point since December 2023. As of Friday’s close, the precious metal had posted a substantial weekly gain of 2.33 %, standing close to $2,082.
Bullion’s bullish momentum can be attributed in part to a moderate pullback in US Treasury yields, a reaction sparked by two major economic reports that left investors pondering their implications for the Federal Reserve’s monetary policy stance. .
To start, the core PCE deflator for January stood at 0.4% MoM and 2.8% YoY, meeting consensus estimates. Wall Street, rattled by the recent CPI and PPI data, had been bracing for another upside surprise in inflation, but was relieved when the FOMC’s preferred price indicator landed precisely at its expected mark.
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Adding to the narrative, disappointing Manufacturing PMI (ISM) numbers showed accelerated contraction last month, reinforcing the decline in yields. Traders speculated that weak manufacturing sector output could lead the US central bank to begin easing its stance sooner than initially planned.
Looking ahead, traders should keep an eye on the upcoming US employment data for February to better understand the market’s trajectory. A blockbuster report reflecting strong January numbers would undermine hopes of an early Fed pivot toward rate cuts, which could send gold prices tumbling.
On the other hand, if nonfarm payrolls numbers disappoint projections and hint at growing economic headwinds, interest rate expectations are likely to recalibrate toward a more dovish outlook, weighing on yields. This scenario is set to support precious metals.
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Change in |
Long pants |
Bermuda |
I HEARD |
| Daily | -eleven% | 7% | -2% |
| Weekly | -sixteen% | 24% | 1% |
GOLD PRICE (XAU/USD) TECHNICAL ANALYSIS
Gold broke through trendline resistance at $2,035 and broke another key top at $2,065 last week, moving closer to surpassing the late December high of around $2,085. If the bears fail to contain the price at this point, it could trigger a rally towards the yellow metal’s record high near $2,150.
On the other hand, if the sellers return and cause a bearish reversal, initial support appears at $2,065. Further losses below this level could trigger a pullback towards the 50-day simple moving average at $2,035. If weakness persists, attention will turn to the $2,010/$2,005 range.