- Summary:
- Gold price has been on a four-month winning streak and recorded profits in eight of the last ten months. Here's why the streak will continue.
Gold price receded from its all-time highs on Friday as investors tamed their appetite ahead of the release of US jobs data. The commodity was up 0.1 percent on the daily chart at the time of writing, trading at $2,749 per ounce at the spot market. However, that was a substantial drop from the previous two sessions when the commodity hit record highs of $2,790 in successive days.
Gold price is on a four-month winning streak, and has gained in eight of the last ten months, signaling a risk-off sentiment. The central focus in markets on Friday will be the Non-Farm Payrolls (NFP) data and unemployment rate figures for October. While there is a near-unanimous consensus that the Federal Reserve will lower interest rates by 0.25 percent in November, recent mixed signals by the US economy are a cause for concern.
Key indices have performed poorly this week, ignoring forecast-beating quarterly revenues reported by major corporations like Alphabet, Meta, Apple and Amazon. The Dow Jones Index, S&P 500 and Nasdaq Index recorded their first monthly loss after five successive months of gains. The biggest concern is the high AI-related capital expenditure by the big tech companies, which is projected to grow in the coming quarters, raising concerns over reduced profit margins.
Gold price has safe haven propulsion from the geopolitical front after an Hezbollah attack on Thursday left seven people dead in Northern Israel. That has raised concerns of a possible escalation of the conflict, which had until recently cooled down after Iran played down Israel’s retaliatory attack. On the other hand, rising US treasury bonds will limit the upside for gold price. Yields on benchmark 10-year bonds were at 4.495 percent at the time of writing, the highest level in over three months.
Gold price prediction
Gold price pivots at 2,749, and the upside will prevail if the price action stays above that level. With the buyers in control, initial resistance will likely come at 2,755. However, a stronger upward momentum could break above that level to test 2,760.
Conversely, moving below 2,749 will shift the momentum to favour the downside. In that case, the first support will likely come at 2,742. If the sellers extend that control, it could break below that level to invalidate the upside narrative. Also, the decline could extend to test 2,734.
