Gold is holding below $4,100 as traders wait for next week’s Federal Reserve rate decision. A stronger-than-expected jobless claims report and the ECB’s decision to hold rates have tightened the focus on interest-rate risk, while technical signals sit in neutral territory.
Gold August futures opened at $4,053.40 per troy ounce on Friday, up 0.1% from Thursday’s close, then edged up to $4,057 by 8:07 a.m. ET. After stretching above $4,100 on Thursday, the metal pulled back.
The European Central Bank held interest rates steady on Thursday, and the consensus expects the Fed to do the same when its committee meets next week. The latest jobless claims report came in at 187,000 new claims against a median forecast of 212,000. A stronger labor market would likely encourage higher interest rates later in the year if inflation stays above the Fed’s 2% target.
Higher rates limit gold by raising the opportunity cost of holding the metal. Investors are also watching Iran war developments, weighing U.S. interest-rate risk against global trade disruptions tied to the Middle East conflict.
Gold reached its high for the week at $4,166 on Wednesday, but the rally stalled below the July swing highs at $4,180 and $4,203. The price then broke below its 100-hour moving average near $4,072 and its 200-hour moving average near $4,047 on Thursday, before finding buyers near swing support at $4,022.
Gold now trades between the two moving averages, leaving the technical picture neutral. Traders are watching for a break above $4,072 to tilt the bias toward buyers, or a move below $4,047 with momentum to hand control back to sellers.
Gold sits 2% above where it traded a week ago and 21.2% higher than a year ago, though it is down 1.2% over the past month.
Sources: Yahoo Personal Finance, investingLive
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