Defensive money returns to GOLD as US labor data worsensOANDA:XAUUSD prices maintained a slight decline in the Asian session, trading around $4,075/ounce as the market turned its attention to the Fed meeting minutes. The upside momentum is weakening, but downside pressure remains limited as money flows continue to seek support from the prospect of easing policy.
New data from ADP reinforces the view that the US labor market is losing momentum. The private sector lost an average of 2,500 jobs a week in the four weeks to November 1, as a host of large companies from Amazon to Target announced plans to cut staff. A report from Challenger showed the number of planned layoffs in October was the highest in more than two decades. Jobless claims rose to 1.9 million, and data from the Cleveland Fed showed 39,000 layoff announcements last month.
These signals are emerging just as the market remains concerned about a weakening U.S. economy, even though expectations for rate cuts are not yet firmly established. Still, sentiment has shifted: the FedWatch tool now shows nearly a 50% probability of a rate cut at the Fed’s December meeting, up from below 40% earlier this week. This development has helped gold rebound after three consecutive losing sessions, especially since the precious metal typically benefits in a low-rate environment.
However, gold’s recovery remains relatively fragile. Prices fell more than 3% on Friday and dropped another 1% on Monday as expectations for Fed easing were revised. This has made the market more sensitive to signals from monetary policy and economic data.
The short-term focus is on the minutes of the late-October FOMC meeting and the upcoming nonfarm payrolls report, both to be released this week. Forecasts suggest U.S. job growth may slow to around 55,000 in September—a pace reflecting cooling hiring demand.
Several Fed officials have struck a more dovish tone. Governor Waller described the labor market as “weak” and noted that core inflation is moving closer to the 2% target. Richmond Fed President Thomas Barkin expects upcoming data to offer more clues on the direction of the economy. These comments, combined with the market’s interpretation of soft labor signals, are creating an environment in which each new data point has the potential to significantly impact gold pricing.
In my view, gold is likely to continue trading within a narrow range as the market awaits clearer confirmation from the Fed while simultaneously assessing the risks of a slowing U.S. economy. Rate-cut expectations remain the key factor supporting gold in the current phase.
Technical analysis and suggestions OANDA:XAUUSD
Recovery Trend and Conditions for a New Uptrend
This morning's developments show that gold prices are trying to recover after a long correction, with a bounce back to the $4,070/ounce area, corresponding to the lower border of the medium-term Ascending Channel.
The price structure has remained within the uptrend channel since August, but the momentum has weakened significantly after the price failed twice before the strong resistance zone of $4,216/ounce (Fib 0.236). The $3,972–$3,990/ounce (Fib 0.382) level continues to act as an important buffer zone, and the fact that the price did not break this zone in the recent decline is a positive signal.
RSI hit the oversold zone and is bouncing up, indicating that selling pressure is weakening and the market is entering a rebalancing phase.
For a new uptrend to form, it is necessary:
Necessary condition: price holds above 3,972 USD/ounce, remaining above the rising trend line of the price channel.
Sufficient condition: close above 4,128 USD/ounce and then confirm above 4,216 USD/ounce, the key resistance zone that determines the return to a strong uptrend.
Only when these two conditions are met, the medium-term uptrend structure will be fully restored.
SELL XAUUSD PRICE 4116 - 4114⚡️
↠↠ Stop Loss 4120
→Take Profit 1 4108
↨
→Take Profit 2 4102
BUY XAUUSD PRICE 4025 - 4027⚡️
↠↠ Stop Loss 4021
→Take Profit 1 4033
↨
→Take Profit 2 4039
