Spot Gold Holds Steady as U.S. Dollar Weakened Ahead of Non-Farm Payrolls
Gold prices are holding firm above all moving averages as the U.S. dollar struggled to gain momentum amid concerns over interest rate cuts. The U.S. dollar index has been unable to break through the 200-day moving average resistance, signaling potential weakness ahead.
Amidst the uncertainty, spot gold fluctuated within a narrow range during the Asia-European session on Friday, currently trading around US$2,055.14 per ounce, not far from the one-month high set overnight. The potential for a record high looms as gold has risen nearly 2% so far this week – marking the biggest weekly gain since last week.
The U.S. dollar index has fallen 0.47% so far this week, which may signal its first weekly decline of the year, as the market anticipates a potential interest rate cut by the Federal Reserve. Currently, there is a 38% chance of a rate cut in March, down from over 70% a month ago, however, the probability of a cut in May is nearly 100%.
Renewed jitters at regional U.S. banks have fueled a rush for safe-haven U.S. Treasuries, analysts say, providing support for gold prices as the market anticipates potential rate cuts. The technical front also suggests strong bullish signals for gold, with analysts anticipating the next target for gold prices to be $2,100.00 per ounce.
With the U.S. dollar facing resistance and gold prices holding steady, the market remains cautious ahead of U.S. employment data later in the day. The data will be key in determining when the Federal Reserve might begin cutting interest rates and could have substantial impacts on both the U.S. dollar and gold prices.
At this point in time, the overall outlook for gold prices is bullish, with analysts expecting a continued uptrend. As of 16:06 Beijing time, spot gold was trading at $2,055.51 per ounce. With the technical indicators pointing towards a bullish trend, market participants are keeping a close eye on how the U.S. dollar and employment data will drive gold prices in the coming days.