Gold Subdued Ahead of the NFPs & after Thursday’s PCE-Fueled Rally
XAU/USD Analysis
Gold started the week on the back foot, but quickly moved into profits with a three-day rally, that culminated in four-month highs, fueled by Chair Powell's speech and US economic releases.
Mr Powell pointed to a slower pace of rate hikes, which could come "as soon as the December meeting", on Wednesday [1]. This was followed by softer inflation figures yesterday, as the Core PCE printed +5.0% y/y in October, from +5.2% previously. The headline figure eased to +6.0% y/y from 6.3% prior and the lowest level since the start of the year.
In the meantime, as series of jobs data showed a decline in private payrolls and job vacancies, which are also supportive of a less aggressive monetary stance by the Fed. The above developments have cemented markets expectations for a smaller 50 basis point rate increase this month.
XAU/USD rallied on the news and extends its gains from the best month of the year, breaking above the 38.2% Fibonacci of the 2022 high/low slump. This brings 50% Fibonacci in its crosshairs (1,842), but a pullback or a catalyst will be required for taking this resistance out and looking towards 1,880.
On the other hand, the Fed still expects to tighten further and Chair Powell talked of a higher terminal rate than previously expected and the need to hold policy at a restrictive level "for some time", so market reaction may be premature.
Furthermore, XAU/USD eases today and has not yet taken out the August highs (1,880), while the Relative Strength Index (RSI) reveals overbought conditions. This can create pressure back towards the 200Days EMA (at around 1,760), although further decline that would test the key 1,725-1 area, has a higher degree of difficulty.
In any case, the trajectory of the precious metal will likely be determined by today's US Employment Report, which has the potential to produce outsized moves.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 18 Apr 2026 https://www.federalreserve.gov/newsevents/speech/powell20221130a.htm |
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