Gold prices have seen a significant increase, with a troy ounce of the precious metal now priced at 2517 USD. This surge comes as the market eagerly anticipates the release of August’s crucial US employment report, which could have implications for the Federal Reserve’s interest rate outlook. Lower interest rates would reduce the cost of holding gold as a non-yielding asset, making it a more attractive investment option.
The latest statistics reveal concerning trends in the US employment market, with private employers hiring at the slowest pace in 3.5 years in August. This slowdown is accompanied by a decrease in job vacancies and a decline in manufacturing activity. These factors all point towards a weakening US economy, leading to expectations of a 50-basis points rate cut by the Federal Reserve in September. Currently, investors are pricing in a 41% probability of this scenario, indicating a high level of anticipation for further monetary policy easing.
On the H4 chart for XAUUSD, support has been found at 2472.00, with a growth wave towards 2513.62 currently in progress. The market is consolidating around this level, with a potential breakout towards 2555.50 in the cards. The MACD indicator confirms this bullish trend, with the signal line above zero and sloping upwards. Meanwhile, the H1 chart shows a growth wave to 2513.62, with a range extended between 2523.20 and 2504.00. A breakout in either direction could lead to further movement towards 2555.50, supported by the Stochastic oscillator’s signal line near 80.
Gold prices are likely to continue their upward trajectory as weak US employment data and expectations of a rate cut by the Federal Reserve drive investor sentiment. Technical indicators suggest a bullish trend for XAUUSD, with potential for further growth in the near term. As market conditions remain uncertain, investors should closely monitor economic developments and central bank announcements for any shifts in gold prices.