FX.co ★ XAU/USD, GOLD

The price of gold (XAU/USD) retreated after reaching a high of $4,106 per ounce, marking a decline of nearly 1% on Friday. This pullback followed an exceptionally strong U.S. jobs report, which significantly exceeded market expectations and bolstered speculation that the Federal Reserve might raise interest rates at its scheduled December meeting. Following the release of the non-farm payrolls data for October, gold prices hovered around $4,060; the data showed that the U.S. economy added 165,000 jobs, far surpassing the market forecast of 65,000. Furthermore, the non-farm payroll figure for September was revised upward—from an initial 29,000 to 60,000—while the unemployment rate edged down from 4.2% to 4.1%, reflecting an expansion in hiring activity across various sectors. In addition to the robust employment data, the University of Michigan’s consumer confidence index for November rose to 51 points from 48 in October, while one-year inflation expectations fell from 4.7% to 4.3%. Taken together, these macroeconomic indicators suggest that the U.S. economy remains resilient, despite significant volatility in energy prices. The stronger-than-expected jobs data fueled a sharp recovery in the U.S. dollar and shifted market expectations toward a more hawkish stance from the Federal Reserve. The U.S. Dollar Index (DXY), which measures the dollar's value against a basket of six major currencies, rose by 0.62%, reclaiming the 102.00 level. Meanwhile, the CME FedWatch tool indicated that the futures market now assigns a 77% probability to a 25-basis-point interest rate hike at the Federal Reserve’s December meeting—up from 67% on Thursday. St. Louis Federal Reserve President Alberto Musalem emphasized a hawkish monetary policy stance, noting persistent public concern regarding elevated inflationary pressures. He attributed the persistence of inflation primarily to shocks in the energy market and substantial capital expenditures related to artificial intelligence infrastructure. Despite the notable increase in market expectations for a hawkish monetary policy, the yield on the benchmark 10-year U.S. Treasury note retreated from its intraday high, ultimately closing at 4.840%. This trend reflects a nuanced reaction within the bond market, as investors weigh the resilience of economic growth against the pressures exerted by rising borrowing costs. Furthermore, escalating geopolitical tensions in the Middle East have complicated safe-haven capital flows, helping to limit further declines in gold—a non-interest-bearing asset. While diplomatic negotiations between the United States and Iran continue—with media reports suggesting a potential diplomatic resolution—tensions in the region remain high as Houthi rebels persist in their attacks on Saudi Arabia. Furthermore, regional media reports indicate that Tehran is actively preparing for a possible military escalation. Israeli media also suggest that Washington may be planning intensive operations against Iranian infrastructure, with the aim of compelling Iran to accept more favorable terms in the nuclear deal negotiations. Looking ahead to the coming week, the market’s focus has shifted toward key fundamental factors, including inflation data (the U.S. Consumer Price Index), weekly initial jobless claims, and scheduled public remarks by several Federal Reserve officials. From a technical perspective, the spot gold price (XAU/USD) experienced a clear bearish reversal after reaching a weekly high of $4,146 on Thursday, subsequently retreating below the psychological $4,100 level. While the short-term trend remains unclear, the overall bias continues to be bearish. The 14-day Relative Strength Index (RSI) has declined from near the neutral 50 level, signaling a weakening in buying momentum. Consequently, pending new guidance from next week’s inflation data, spot gold prices are expected to consolidate within a weekly range of $4,050 to $4,150. To initiate a sustainable uptrend, gold bulls must push prices above a key technical resistance zone formed by the 100-day simple moving average (at $4,197) and the 50-day simple moving average (at $4,202). Once this is achieved, gold prices could test the significant psychological level of $4,300. Conversely, if sellers regain structural control and drive the price below the key support level of $4,000, the overall downtrend could accelerate, potentially targeting the low of $3,919 recorded on November 4, followed by the year-to-date low of $3,879 recorded on October 30.