Gold rises above $4,300 as traders brace for US Nonfarm Payrolls
Gold (XAU/USD) extends its recovery on Friday as technical buying accelerates, even as market sentiment remains cautious due to developments in the Middle East and uncertainty over the Federal Reserve’s (Fed) interest-rate outlook.
Gold prices have surged above $4,300 following traders' preparations for the US Nonfarm Payrolls (NFP) release, a key economic indicator that gauges job growth in the United States. The precious metal climbed to a seven-week high of $4,322, supported by technical buying and optimism that the Strait of Hormuz could reopen, potentially easing oil prices and reducing energy-driven inflation concerns.
However, the market remains cautious due to uncertainty surrounding the Federal Reserve's interest-rate outlook, with the probability of a September rate hike falling to 55% as of recent estimates. The upcoming NFP report, expected at 12:30 GMT, could significantly impact gold's trajectory, as rising employment figures might weaken the case for further rate hikes and bolster the US Dollar, which in turn could undermine gold's appeal as an alternative investment.
Technical indicators, such as the Relative Strength Index (RSI) nearing overbought levels and the Moving Average Convergence Divergence (MACD) histogram staying positive, suggest strong bullish momentum in gold's price action. Traders are closely watching the Bollinger Bands and key support/resistance levels, with the upper band at $4,256 and the 100-day Simple Moving Average (SMA) at $4,390 representing potential turning points for the metal's future direction.
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