Gold Price Forecast: XAU/USD Stages A Modest Recovery Above $1,980 After Fed Rate Pause
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- Gold price attracts some buyers after the Federal Open Market Committee (FOMC) rate decision.
- FOMC maintained the monetary policy unchanged at 5.5% at its November meeting.
- Gold traders will focus on the weekly Initial Jobless Claims ahead of Friday's Nonfarm Payrolls (NFP).
Gold price (XAU/USD) stages a modest recovery during the early Asian session on Thursday. The rebound of precious metal is bolstered by a decline in the US Treasury bond yields following the the Federal Open Market Committee (FOMC) policy meeting. As of writing, gold price is trading higher on the day at $1,985.
Meanwhile, the US Dollar Index (DXY), the value of the USD relative to a basket of global currencies, edges lower to 106.67, retracing from the weekly highs of 107.10. The US Treasury bond yields correct lower, with the 10-year dropping to 4.73% and the 2-year yield falling below 5.00%.
The FOMC maintained the monetary policy unchanged at 5.5% at its November meeting late Wednesday. Federal Reserve (Fed) Chairman Jerome Powell stated that the rise in long-end yields needs to be persistent and driven by higher term premiums to influence monetary policy while mentioning that the current monetary policy is already restrictive. The markets believe that the rate hike cycle is already over. This, in turn, exerts some selling pressure on the US Dollar (USD). According to the CME FedWatch Tool, the odds of a rate hike for a December meeting is around 22%.
On the other hand, the weaker Chinese data might cap the gold’s upside as China is the world's largest gold producer and consumer. On Wednesday, China's Caixin Manufacturing PMI dropped to 49.5 in October from September’s expansion of 50.6, worse than the expectation of a 50.8 rise.
Moving on, gold traders will take monitor the US employment data, including the weekly Initial Jobless Claims. The figures are expected to rise by 210K for the week ending October 27. The attention will shift to Friday's Nonfarm Payrolls (NFP), which is expected to add 180K jobs in October. These events could give a clear direction to the gold price.
XAU/USD
| OVERVIEW | |
|---|---|
| Today last price | 1984.02 |
| Today Daily Change | 0.27 |
| Today Daily Change % | 0.01 |
| Today daily open | 1983.75 |
| TRENDS | |
|---|---|
| Daily SMA20 | 1925.58 |
| Daily SMA50 | 1916.69 |
| Daily SMA100 | 1924.82 |
| Daily SMA200 | 1933.23 |
| LEVELS | |
|---|---|
| Previous Daily High | 2007.98 |
| Previous Daily Low | 1978.85 |
| Previous Weekly High | 2009.49 |
| Previous Weekly Low | 1953.61 |
| Previous Monthly High | 2009.49 |
| Previous Monthly Low | 1810.51 |
| Daily Fibonacci 38.2% | 1989.98 |
| Daily Fibonacci 61.8% | 1996.85 |
| Daily Pivot Point S1 | 1972.41 |
| Daily Pivot Point S2 | 1961.06 |
| Daily Pivot Point S3 | 1943.28 |
| Daily Pivot Point R1 | 2001.54 |
| Daily Pivot Point R2 | 2019.32 |
| Daily Pivot Point R3 | 2030.67 |
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