Gold is consolidating above $4,140 after Fed officials Williams and Jefferson signaled little urgency to raise rates again in October. Friday's US non-farm payrolls report will decide whether the metal extends its pullback or faces a hawkish repricing.
Gold is holding above the $4,140 level after Fed's Williams and Fed's Jefferson delivered dovish comments suggesting no urgency in raising interest rates again in October. The remarks echo September's dot plot, which already pointed to a Federal Reserve with low appetite for further tightening.
That stance could keep supporting gold if the Fed continues to sound more dovish than markets expect, since real yields would fall as inflation expectations rise faster than nominal yields. The US non-farm payrolls report due today is the next catalyst for the metal.
Payrolls data holds the near-term direction
A blockbuster report, with data beating expectations across the board, would likely be needed to raise the probabilities for an October rate hike again, which could weigh on gold in the short term on another hawkish repricing. In-line or weaker-than-expected data, on the other hand, would likely provide support to extend the recent pullback.
Technical picture points to a defined range
On the daily chart, gold is slowly approaching a downward trendline, where sellers are expected to lean with a defined risk above it to position for a drop toward the 3,885 level. Buyers, meanwhile, want to see price break higher to pile into a rally toward the 4,700 level next.
The four-hour chart shows sellers have a better risk-to-reward setup around the trendline and the 4,240 resistance, while buyers need a break higher to open the door to new highs, with the 4,400 level as the first target. On the one-hour chart, minor support sits around 4,140, where price has been rejected several times in the past few days; a pullback there would likely draw buyers with a defined risk below it, while a break lower would increase bearish bets toward the 3,885 level.
Source: investingLive
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