gold prices are experiencing upward momentum, largely driven by a declining US dollar due to dovish sentiment from the Federal Reserve. Concerns over a potential economic slowdown in the United States are also contributing to the appeal of gold as a safe-haven asset. Traders are showing increased caution as they anticipate the release of key employment data.
On Thursday, gold prices edged closer to the $2,524 – $2,525 supply zone, aided by a weakening dollar influenced by expectations of a significant interest rate cut by the Federal Reserve later this month. Recent employment data from the US painted a mixed picture, indicating a slowing labor market, which amplified fears about the overall health of the economy. This atmosphere of uncertainty has raised expectations for a more aggressive monetary policy easing, causing the dollar to retreat from a two-week high achieved earlier in the week.
Investor sentiment has been further dampened by heightened concerns of an economic downturn and ongoing geopolitical tensions, which have collectively boosted demand for gold . While the price of gold remains below its all-time high from August, traders are poised to react to the upcoming monthly employment report, which is expected to offer insights into the Fed’s future rate decisions. This information is likely to influence short-term trading strategies for the precious metal.
From a technical standpoint, gold ’s movement beyond the $2,524 – $2,525 mark could serve as a positive signal for bullish traders. Indicators suggest that gold is positioned for additional gains as current momentum remains robust but not overbought. Conversely, the $2,500 level is seen as a key support point. Should prices fall below this threshold, they could drop to the $2,471 – $2,470 range, risking deeper declines toward the 50-day simple moving average near $2,440, and potentially towards the $2,400 level.
