GOLD | Investors Capitalize on Weak NFPs

Nov 6, 2023

ANALYSIS & OUTLOOK XAUUSD
- Weaker US labor data and safe-haven demand boosted gold prices.
- All eyes are on Fed Chairman Jerome Powell and Michigan consumer sentiment.
- XAUUSD may experience some downsides.

XAUUSD BASIC CONTEXT
Gold prices rose on the back of a weaker-than-expected Nonfarm Payrolls report, which showed higher unemployment and lower wage growth. This could signal a weaker job market in the region. The Federal Reserve will welcome the data as it addresses concerns about a recession and stagflation. As a result, US Treasury yields and real interest rates fell, making gold more attractive to investors.

The Israel-Hamas war was volatile and supported gold prices as a safe haven. Escalation could increase gold prices. Next week will be quieter but Fed guidance will cause volatility. Fed Chairman Jerome Powell and other officials will speak. Michigan consumer sentiment could impact the US dollar.

Price action XAUUSD the daily is currently trading within a rising wedge pattern that typically appears after a previous downtrend. In this case, the uptrend negates much of the validity of the pattern but with the Relative Strength Index (RSI) in overbought territory, a pullback may not be out of the question. A longer-term view could see the gold pair pull back after which a potential golden crossover could form, allowing XAUUSD to rally once more.

Resistance levels: 2048.79 - 2000.00 - 1987.42
Support levels: Wedge support - 1950.00