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The price of gold has been under pressure this week due to a strong US dollar in the open, which has pushed to new highs versus its equivalents, with a strong US labor market confirming bets on higher interest rates as traders waited for data likely to reveal stubbornly high inflation.
At the time of writing, the GOLD price had fallen to a low of $1,691.89, reaching a high of $1,699.91 earlier in the day. Nonfarm payrolls increased by 263,000, exceeding the consensus projection of 250,000 new positions. The service industry created 244,000 jobs, primarily in education, healthcare, leisure, and hospitality.
The unemployment rate declined to 3.5% in September from 3.7% in August, against expectations that it would remain constant. Labor-force participation fell 0.1 percentage points to 62.3%.
XAU/USD
This contradicts their efforts to restore the demand-supply balance in the labor market in the face of inflation, implying that substantial rate hikes are a foregone conclusion for the foreseeable future, which is a headwind for gold prices versus a flattening curve.
This will be another key week in the coming days, with numerous US calendar events, including the minutes of the previous Fed meeting, US inflation data, and Retail Sales.
Gold (XAU/USD) Technical Outlook
The gold price forecast is bearish, as it has fallen below a major support level of $1,703 per ounce. The gold price faced significant downward pressure in the previous sessions before breaking through the $1,708.50 level and approaching the $1,686.40 level.
On the downside, a break of the $1,686.40 level could push the gold price even lower, towards $1,660, supporting the bearish trend dominance in the coming sessions.
Gold’s major resistance remains at $1,703, and above this, it has the potential to go after $1,715 per ounce. The trading range for today is expected to be between $1,665.00 support and $1,705.00 resistance.
Good luck!
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