FX.co ★ XAU/USD, GOLD

Gold prices experienced a volatile session on Friday, initially surging to $2,760 following the release of the US non-farm payrolls (NFP) data. The NFP data, which showed a smaller-than-expected job loss of 12,000 in October, initially boosted gold as it suggested a potential easing of Federal Reserve monetary policy. However, subsequent mixed economic data from the Institute for Supply Management (ISM) dampened this optimism. The ISM manufacturing PMI declined to 46.5 in October, indicating a contraction in manufacturing activity. Conversely, the ISM manufacturing price index rose to 54.8, suggesting inflationary pressures. This conflicting data created uncertainty about the future path of interest rates, which in turn impacted gold's price direction. While a potential rate cut could benefit gold as it reduces the opportunity cost of holding non-interest-bearing assets, inflationary pressures could weigh on the precious metal. Geopolitical tensions also played a significant role in gold's price movement. A Hezbollah rocket attack in northern Israel, which killed seven people, reignited fears of a broader conflict in the Middle East. This heightened safe-haven demand for gold, driving prices higher. Additionally, the ongoing US presidential election, with its associated uncertainties, further supported gold's appeal as a safe-haven asset.

Technically, gold prices have been trending upwards across various timeframes. However, the recent sell-off has pushed the Relative Strength Index (RSI) below the 50 level, indicating bearish momentum in the short term. A break above the $2,790 resistance level could signal a resumption of the uptrend, potentially leading to a move towards the $2,800 and $2,850 resistance levels. Overall, gold's price trajectory remains influenced by a complex interplay of economic, monetary, and geopolitical factors. While the recent sell-off has tempered bullish sentiment, the underlying uptrend and safe-haven demand continue to provide support for the precious metal. Investors should closely monitor developments in the US economy, Federal Reserve policy, and geopolitical events to assess the potential impact on gold prices.