Gold prices have been on the rise, with a troy ounce of the precious metal currently priced at 2517 USD. The market is eagerly awaiting the release of August’s crucial US employment report, as it could have a significant impact on the Federal Reserve’s interest rate outlook. Lower interest rates are expected to reduce the cost of holding gold as a non-yielding asset.
US Employment Market Signals
The latest statistics indicate a weakening employment market in the US, with private employers hiring at the slowest pace in 3.5 years in August. This, coupled with a decline in job vacancies and manufacturing activity, paints a negative picture of the US economy. Investors are pricing in a 41% probability of a 50-basis points rate cut by the Fed in September.
Technical Analysis
On the H4 chart, XAUUSD has received support at 2472.00 and is currently forming a growth wave towards 2513.62. An upside breakout could lead to further growth towards 2555.50. The MACD indicator confirms this scenario, with its signal line above zero and sloping upwards.
On the H1 chart, a growth wave to 2513.62 has been completed and the range is extended between 2523.20 and 2504.00. A downward breakout could result in a decline to 2491.55, while an upward breakout may continue the trend towards 2555.50. The Stochastic oscillator supports this scenario, with its signal line near the level of 80 and preparing to decline to 20.
Given the weakening US economy and the high probability of a rate cut in September, it is reasonable to expect gold prices to continue rising. Investors should monitor the market closely for any developments in the US employment report and the Fed’s interest rate decision. Gold remains a popular choice for investors seeking a safe-haven asset in times of economic uncertainty.