Gold prices (Yellow Metal) extend their momentum from the prior day’s mixed macroeconomic signals from the United States, rising from the $2,603 region—near a three-week trough—and gathering positive momentum for the second consecutive day this Friday.
Thursday’s U.S. data revealed the slowest annual increase in the headline Consumer Price Index (CPI) since February 2021, alongside a sharp uptick in weekly unemployment claims. These figures hint that the Federal Reserve (Fed) may continue its path of reducing interest rates, placing USD bulls on the defensive, as the greenback hovers just below its mid-August peak, indirectly benefiting the yield-less precious metal.
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Simultaneously, the likelihood of the Fed adopting a more aggressive stance on easing has largely dissipated, with another substantial rate cut in November seemingly off the table. These expectations were further bolstered by the release of the September FOMC meeting minutes, offering support to the US Dollar and potentially restricting further upward movement in Gold prices.
Additionally, market optimism surrounding potential fiscal stimulus announcements from China this Saturday—meant to invigorate the world’s second-largest economy—may also suppress the allure of the safe-haven metal. Thus, prudence is advised for bullish traders, especially with the upcoming U.S. Producer Price Index (PPI) data release.
Technical Outlook: Gold Set to Target New Highs Near $2,685-$2,707
From a technical vantage point, the recent solid rebound off the $2,603 level, coupled with a break back above the $2,630 static support, now turned resistance, paints a favorable picture for bullish traders. The momentum is reinforced by the daily chart’s oscillators, which remain comfortably in positive territory, suggesting that the path of least resistance points upward for Gold. As such, further gains toward the $2,658 horizontal resistance seem plausible, with an eventual push to the $2,672 supply zone highly likely. This sustained momentum could drive Yellow Metal towards retesting the all-time high near $2,686, last seen in September. Beyond that, a decisive break through the $2,700 psychological threshold would pave the way for an extension of the long-standing bullish trend that has dominated for months.
On the downside, the Asian session low near $2,627 now appears to offer immediate support, guarding against deeper retracements. Should this level fail to hold, Gold could face a more substantial test of the key $2,600 support level. A clear break beneath this mark could ignite fresh bearish pressure, potentially accelerating declines toward the $2,560 zone, followed by a deeper pullback to the $2,530 area, and eventually, the $2,500 psychological support level.
