US Jobs Report in Focus as Traders Digest FOMC


Gold, XAU/USD, FOMC, Speculators, Jobs Report, Technical Outlook – Talking Points

  • Gold prices move slightly higher in APAC trading as the US jobs report nears
  • Speculators trimmed their bullish gold bets ahead of the FOMC decision
  • XAU/USD sees a possible trend reversal chance on Double Bottom pattern

Gold prices are moderating after falling nearly 1% on Wednesday in response to the FOMC decision. The US central bank hiked its benchmark rate by 75 basis points in a widely expected move. Fed Chair Jerome Powell pushed back on the narrative that the Fed would pause rate hikes, stating: “It’s very premature, in my view, to think about or to be talking about pausing our rate hikes.” Mr. Powell went on to say that rates will most likely have to go higher than previously forecasted. Fed funds futures moved to price a 5% terminal rate at the May 2023 meeting.

Gold prices fell on those comments. Treasury yields and the US Dollar rose, reducing the yellow metal’s investment appeal. The US Dollar DXY Index and mid- to long-term Treasury rates remain below their recent highs despite a modest increase in Fed rate hike bets. Assuming the US Dollar and rates across much of the curve remain off their highs, bullion prices should hold above recent lows around 1,615 to 1,617.

Still, downside risks remain, and because the Fed’s outlook relies on economic data, gold prices are largely driven by how the market thinks the Fed will interpret and act on that data. A resilient US labor market has complicated central bank efforts to lower inflation. While interest rates take longer to affect the jobs market, data such as job openings and initial jobless claims have not yet signaled a turn. According to the Job Openings and Labor Turnover Survey (JOLTS) for September, job openings accelerated to 10.72 million, beating the +10 million estimate and up from an upwardly revised 10.28 million in August.

That said, the US non-farm payrolls report (NFP) on Friday offers gold’s next directional cue. According to a Bloomberg survey, analysts expect the US to add 200k jobs for October. That would be the weakest growth since December 2020, likely cooling Fed rate hike bets and dragging the USD and yields lower, a positive outcome for gold. The downside risk would be a stronger-than-expected number.

Gold – Speculator Positioning

Gold speculator trimmed their bullish bets on the metal, according to the latest Commitments of Traders report (COT) from the CFTC. For the week ending October 25, non-commercial shorts rose by 9,990, while longs held virtually unchanged. Those trades brought gold’s net long position to 59,342, the lowest since September, which was the weakest long position since April 2019.

Gold Versus Non-Commercial Long/Short Positions

Chart created with TradingView

XAU/USD Technical Outlook

Gold is trading around 0.3% higher in Asia-Pacific trading, which trims the weekly loss to about 0.25%. A potential Double Bottom reversal is in play, which may mark the reversal point of a long-term downtrend. Prices need to break above resistance—the peak between the September and October troughs at 1,729.46—before a breakout is likely.

First, prices would need to clear the descending trendline and the 50-day Simple Moving Average (SMA). The measured move (distance between troughs and peak) puts the breakout target at 1,840.75. If prices fall below the troughs, it would invalidate the pattern. A positive divergence in the Relative Strength Index (RSI) lends support to a bullish outlook.

XAU/USD Daily Chart

Chart, line chart  Description automatically generated

Chart created with TradingView

— Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter





Source link

Related articles

Narwal Freo X Extremely and Freo Professional robots drop to record-low costs!

Jonathan Feist / Android AuthorityEach of those presents can be found from Amazon and are labeled as “restricted time offers.” The low cost is automated, so merely add your favourite mannequin to your...

Zscaler Will Hit $360 Quickly: Right here’s the How and Why

Zscaler Inc (NASDAQ:)’s share worth is predicted to succeed in $360 because of technical worth motion, favorable analyst sentiment, and the outcomes driving it. The newest worth motion has this market breaking out...

Foreign exchange Corporations, Drug Cash, and Cyprus: Mayor’s Allegations Spark CySEC Response

Paphos Mayor Phedonas Phedonos has made robust allegations that Cyprus has turn out to be a part of a global cash laundering community involving Latin American drug cartels. Talking on social media, the mayor claimed that...

Khaleej Occasions Adopts VeraViews

This content material is offered by a sponsor. PRESS RELEASE. Dubai Media Metropolis, UAE, June 2nd, 2025 – VeraViews, an end-to-end ecosystem for clear promoting, has introduced a strategic partnership with Khaleej Occasions...
spot_img

Latest articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

WP2Social Auto Publish Powered By : XYZScripts.com