GOLD Pullback and then Target 2100.

4 Nov 2023

On Friday, the XAU/USD pair reached an intraday high of just under $2,005, in response to the disappointing US Nonfarm Payrolls (NFP) report, which marked the weakest performance in almost three years. However, Gold prices managed to recover to the midrange of the day's trading, ultimately closing near $1,992.50. The NFP report for the US fell short of expectations, revealing that the US added only 150 thousand jobs in October, a significant decline from the previous month's robust figure of 297 thousand job additions, which had already been revised downward from the initial estimate of 336K. Market expectations were initially set at 180K for the October reading. This headline miss led to a surge in global markets as investors welcomed the potential halt to Federal Reserve (Fed) interest rate hikes. Earlier in the week, Gold reached a weekly high of $2,008 but later dipped to a low of $1,970. Despite the disappointing NFP report, Gold faced challenges in securing substantial gains. This is due to the prevailing caution among investors regarding cooling US economic data. Inflation and excessive wage growth continue to be pivotal concerns for the Fed. Therefore, a single subpar NFP reading is unlikely to alter the Fed's stance on maintaining higher interest rates for an extended period. Currently, money markets are pricing in the likelihood of a full percentage point interest rate cut by the end of 2024, but this projection may be premature, given the Fed's efforts to manage price volatility. In the near term, Spot Gold bids indicate the formation of a rising channel, with XAU/USD trading on the positive side of the 200-hour Simple Moving Average (SMA), which is currently trending upward from $1,985. As shown on the chart, in the weekly timeframe, gold broke out of a bearish channel after bouncing in the 0.5 Fibonacci retracement zone. It is currently at the level of 1992 and may experience a pullback to around 1910 before resuming its upward move towards 2100. Let me know what you think, and I wish everyone a great weekend. Regards from Nicola, CEO of Forex48 Trading Academy.