Gold Market Suffers Technical Pressure As Fed Rate Decision and NFPs Await

Markets started the session on a mildly positive note. In actuality, the market is gearing up for a week packed with high-profile data releases and equity announcements, including the latest Federal Reserve policy decision. Data releases this week will include US ISM readings and the latest US Jobs Report. Notable US companies such as Amazon, Apple, AMD, Moderna, and Pfizer are also set to reveal their earnings. Amidst all these, gold prices are also experiencing technical pressure.

The Week Ahead: Key Focus on FOMC, Tech Giants, and Economic Indicators

The Middle East is currently stable and peaceful, diverting attention from gold traders who seek alternative market drivers. Despite this, the demand for central bank gold posits a strong affinity for it, especially from China. Moreover, the investors continue to diversify away from the US dollar and into gold. This week, market sentiment will hinge on the outcome of the US Fed policy decision on Wednesday, with no change in rates expected. Moreover, the latest US Jobs Report on Friday will likely cause pre-weekend volatility.

US Dollar and Gold Forecasts

Interestingly, the US dollar appears lacklustre in early trade. However, at present, it is forming a bullish flag pattern, indicating a potential upward movement. This week’s US data and events will likely determine the next move, with a break higher potentially challenging the recent high at 107.36.

On the other hand, gold is showing signs of short-term bearishness. It has a technical bear flag pattern forming on the daily chart. Confirmation of this setup could lead to a break below $2,280/oz. Resistance is expected near $2,400/oz. Mark in the event of any upward movement.

Trader Sentiment and Market Analysis

According to IG Retail Trader data, 53.40% of traders are net-long on gold, with the ratio of long to short traders at 1.02 to 1. The number of net-long traders has decreased slightly compared to yesterday but remains higher than last week. Conversely, the number of net-short traders has increased from yesterday but decreased compared to last week.

Also read: Gold Price Prediction 2024: A Complete Guide