FX.co ★ XAU/USD, GOLD

Gold prices (XAU/USD) fell on Friday, pressured by strong U.S. non-farm payroll data that triggered a broad-based strengthening of the U.S. dollar. Gold traded around $4,050, down approximately 1.20% for the day—a reversal of the previous upward trend that had reached a two-week high of $4,146 on Thursday. Official economic data showed that the U.S. added 165,000 jobs in October, significantly exceeding market expectations of 65,000. Furthermore, job growth for September was revised upward from an initial estimate of 29,000 to 60,000, while the unemployment rate edged down from 4.2% to 4.1%. These robust employment indicators highlight the continued resilience of the U.S. labor market, granting the Federal Reserve greater flexibility to maintain its hawkish monetary policy. This has bolstered market expectations for another 25-basis-point interest rate hike at the Fed’s December meeting. The prospect of a prolonged hawkish stance—with higher borrowing costs boosting yields on traditional fixed-income assets—increases the opportunity cost of holding non-yielding precious metals, thereby exerting direct downward pressure on gold prices. The strengthening of the U.S. dollar was also reflected in the U.S. Dollar Index (DXY), which rose by 0.62% to trade at approximately 102.22. Yields on benchmark U.S. Treasury bonds also rebounded, with the 10-year Treasury yield rising by 4 basis points to reach 4.88%. Meanwhile, a sell-off intensified in the stock market—driven by sharp declines in technology and artificial intelligence shares—placing gold at risk of being sold off as investors sought liquidity. Institutional investors trimmed their profitable positions in commodities to meet margin calls and cover losses elsewhere in their portfolios. Despite these short-term pressures, gold remains on track to snap a three-week losing streak, aided by a sharp drop in global energy prices this week. The price of West Texas Intermediate (WTI) crude fell by approximately 12% this week, following the Democratic Party’s success in securing a full majority in the U.S. Congress during the midterm elections. Markets anticipate that legislative gridlock will limit federal spending and constrain any potential military action by President Donald Trump against Iran. Nevertheless, geopolitical developments continue to pose potential risks to energy markets and the policies of global central banks. Despite ongoing diplomatic negotiations between Washington and Tehran, a definitive resolution to the U.S.-Iran conflict remains elusive. Tensions have escalated following President Trump’s statement that he has not ruled out further military action against Iranian infrastructure, and that a decision on the matter would be made soon. Since the escalation of hostilities in the Middle East in late February, energy costs—and their direct impact on global inflation—have emerged as a key macroeconomic factor influencing gold prices. This is because rising oil prices often prompt central banks to adopt more hawkish (restrictive) monetary policies.

From a technical perspective, the four-hour chart shows that the spot gold price (XAU/USD) maintains a relatively positive short-term trend, with prices holding above the 50-period and 100-period simple moving averages (SMAs). However, further upside potential is structurally constrained by the 200-period SMA, which currently acts as a level of resistance. Momentum indicators suggest that the market is in a consolidation phase: the 14-period Relative Strength Index (RSI) has retreated from the overbought zone to around 55, reflecting a modest bullish momentum, while the Moving Average Convergence Divergence (MACD) indicator is hovering near the zero line, signaling the absence of a clear trend. On the upside, the 200-period SMA (near $4,114) serves as the primary resistance level, followed by the psychological level of $4,200; gold prices would need to decisively break through these resistance levels to pave the way for further gains toward multi-month highs. On the downside, initial dynamic support is found at the 100-period SMA (near $4,050), followed by the 50-period SMA (near $4,004). A break below these key dynamic support levels could lead to a further decline in prices toward deeper support zones, near this year’s low of $3,870.23; at this point, long-term buyers are expected to enter the market to defend the overall uptrend.