Job growth may have stalled, but higher wages and a reduction in unemployment in the US have all but cemented bets that the US Federal Reserve will start to raise rates as early as March.
This is the opinion of Bloomberg TV anchors this Friday after the first Non-farm Payrolls report for 2022 served to add further credence to the perception of the markets of where the US Federal Reserve would head to following Wednesday’s hawkish FOMC minutes.
Consequently, gold prices are mainly unmoved this Friday, as markets have fully priced in the rate hikes expected in the US as from the end of the first quarter. This scenario follows two days of solid gains posted by the US Dollar, leading to Thursday’s 1.02% downside move on the XAU/USD.
The XAU/USD daily chart shows that price has stalled at the double support provided by the 1788.90 price mark and the ascending trendline that connects the price lows from 29 September till date. A breakdown of these support levels allows the bears to push towards the 1762.51 pivot. Below this level, additional support comes in at 1748.40 initially, before 1721.76 and 1701.39 come into the picture as new targets to the south.
On the flip side, a bounce on the 1788.90 support allows the bulls to aim for 1800.34 and 1821.55. Only if the bulls uncapped these levels can 1850.78 and 1869.39 enter the mix as new targets to the north.