Gold prices (XAU/USD) trades in a tight range around $3,860 during the European trading session on Friday, slightly below the alltime high around $3,900 posted on Thursday. The precious metal trades broadly firm as the partial closure of the UnitedStates (US) government and weakening job market conditions have increased hopes of more interest rate cuts by the Federal Reserve (Fed) in the remaining two policy meetings this year.
- Nonfarm Payrolls Report Cancelled Amid Ongoing U.S. Govt Shutdown
- Hindustan Zinc Surges After Silver Hits All-Time Peak
- Trualt Bioenergy Stock Falls From Debut Peak — Buy, Sell or Wait?
- EXCLUSIVE: Neal Bhai Issues Major Jackpot Alert as Bitcoin Smashes Through $118K – Ethereum Primed for Breakout
- EUR/USD Holds Ground as Dollar Stumbles Amid Historic US Government Shutdown
Lower interest rates by the Fed bode well for non-yielding assets, such as Gold.
According to the CME FedWatch tool, traders see an 87% chance that the Fed will also cut interest rates by 50 basis points (bps) to 3.50%-3.75% by the end of the year.
The White House memo showed this week that the US Growth Domestic Product (GDP) could decline by $15 billion each week on Washington’s closure. At midnight on Tuesday, Washington went into darkness after Republicans failed to persuade Democrats in the US Senate to support the short-term funding bill.
Though the US Nonfarm Payrolls (NFP) data for September is confirmed not to be released due to the US government shutdown, the ADP Employment Change report for the same month has signaled cracks in the labor market.
On Wednesday, the ADP reported that the private sector removed 32K payrolled workers in September, while it was expected to have hired 50K fresh job-seekers.
Seventh Consecutive Weekly Rise
- Gold prices wobbles around $3,860, but looks set for a weekly positive close.
- The Fed is expected to cut interest rates two more times this year.
- The US ADP Employment Change report signaled weakness in the job market.
- XAU/USD Eyes Seventh Consecutive Weekly Close Higher
Gold Price Forecast and Analysis
Gold rates is expected to end the week on a positive note. This will seventh positive closing by the yellow metal in a row. The near-term trend of the Gold price remains bullish as the 20-day Exponential Moving Average (EMA) slopes higher around $3,717.20. Upward-sloping trendline from the August 22 low around $3,321.50 will act as key support for the Gold price.
The 14-day Relative Strength Index (RSI) oscillates inside the 60.00-80.00 range, suggesting a strong bullish momentum.
Bulls Drive Gold (XAU/USD)
On the upside, the Gold price could extend its upside towards $4,200. Looking down, the 20-day EMA will act as key support.