Gold fell nearly 1% to 4,060 USD after a US jobs report beat forecasts and reinforced expectations of a December Fed rate hike. Traders now look to US inflation data and Fed comments this week.
Gold fell nearly 1% to 4,060 USD after reaching a local high of 4,106 USD, as a strong US labour market report reinforced expectations of a Fed rate hike in December. The metal starts the week around 4,100 USD per ounce.
Jobs data beats forecasts
The US economy added 165,000 jobs in October, well above the forecast of 65,000. The previous month's figure was revised upwards, from 29,000 to 60,000. The unemployment rate fell from 4.2% to 4.1%, and job growth was broad-based across sectors.
Consumer sentiment added support for the dollar. The University of Michigan index rose from 48 to 51 points in November, while annual inflation expectations fell from 4.7% to 4.3%.
Against this backdrop, the likelihood of a rate hike in December increased to around 77% from 67% the day before. Fed official Alberto Musalem noted that inflation remains a concern, although inflation expectations remain stable.
Geopolitics stays mixed
Negotiations between the US and Iran are ongoing, and markets acknowledge the possibility of an agreement. Still, Houthi attacks on Saudi Arabia continue, and Tehran is reportedly preparing for an escalation scenario.
Attention in the gold market is now shifting to US inflation data, unemployment claims and fresh comments from Fed officials this week.
Key levels on XAU/USD
On the H4 chart, a recovery wave is developing after the decline to the 3,874 USD area. The structure indicates a short-term upward bias, though a sustained reversal of the preceding decline still needs confirmation.
The nearest target is 4,145 USD, followed by the 4,172 USD zone. A close above that area would open the way towards 4,195 USD.
However, a return below 4,032 USD would invalidate the near-term upside scenario and increase the likelihood of a decline towards 3,972 USD. The Stochastic is above 80, which warns of a local pullback before the next move.
Source: ActionForex
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