Gold held above $4,100 in early European trading on Tuesday but stayed on a weaker footing as firmer expectations of further Federal Reserve tightening reduced appetite for the non-yielding metal. The US dollar struggled to gain traction, in part because headlines around US-Iran diplomacy remained mixed, which helped keep a geopolitical risk premium in place. Market attention is now on the US Consumer Price Index (CPI) release for clearer direction on the Fed’s rate path.
US Labor Data and Fed Rate Expectations
Recent US labour data reinforced the tightening narrative: October Nonfarm Payrolls rose by 165K and August-September payrolls were revised up by a combined 84K, while the unemployment rate edged down to 4.1%. Futures pricing, as measured by the CME Group’s FedWatch Tool, implied an over 80% chance of a December rate rise, maintaining pressure on bullion.
Technical Outlook for XAU/USD
Technically, XAU/USD has broken above the 100- and 200-period Simple Moving Averages (SMAs) on the four-hour chart, with the Relative Strength Index near 57 and the Moving Average Convergence Divergence just above zero; support is flagged at $4,103, $4,059 and $4,042, while resistance sits at $4,180, $4,279 and $4,377.
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