- Gold edges higher ahead of January's US Jobs Report.
- Market anticipates a weaker US Nonfarm Payrolls release on Friday.
- A lower-than-expected NFP could push gold to a new all-time high.
Gold (XAU/USD) is gaining momentum ahead of Friday's highly anticipated US Nonfarm Payrolls (NFP) report. Investors are positioning themselves for a potentially weaker employment figure, which could increase expectations for Federal Reserve rate cuts, further boosting gold's appeal.
Meanwhile, China's central bank, the People's Bank of China (PBOC), has expanded its gold reserves for the third consecutive month. Despite gold trading near record highs, the PBOC added approximately 0.16 million troy ounces in January, according to Bloomberg. Additionally, escalating geopolitical risks - such as former US President Donald Trump's renewed tariff threats against the Eurozone - are reinforcing gold's role as a safe-haven asset.
Market Movers: China Extends Gold Purchases
- China's Central Bank Increases Gold Reserves: The PBOC added 0.16 million troy ounces of gold in January, continuing its accumulation streak after resuming purchases in November following a six-month pause, Bloomberg reports.
- Geopolitical Uncertainty Boosts Safe-Haven Demand: Concerns over trade tensions, potential new tariffs from Donald Trump, and broader geopolitical risks continue to support gold's rally. Citigroup forecasts that gold prices could reach $3,000 per ounce within the next three months.
- Zimbabwe's Gold Production Rises: Zimbabwe's gold output reached 3,134.34 kg in January, up from 2,375.32 kg a year earlier, according to Fidelity Gold Refinery. The increase was largely driven by small-scale miners, while larger mining operations saw a decline in output.
- US Nonfarm Payrolls Data in Focus: The January NFP report, set for release at 13:30 GMT, is expected to show 170,000 new jobs, down from December's 256,000. However, many analysts anticipate a weaker figure, which could further fuel gold's rally.
Technical Analysis: Caution Amid Bullish Sentiment
With gold approaching all-time highs, much depends on the NFP release. If employment data comes in weaker than expected, gold could break into new record territory. However, if the numbers align with forecasts - or are stronger than anticipated - markets could react with profit-taking, triggering a temporary pullback.
Key Technical Levels to Watch:
Support Levels:
- Pivot Point: $2,854
- S1: $2,835
- S2: $2,815
- Major Support: $2,790 (October 31, 2024, high)
Resistance Levels:
- R1: $2,874 (just below the current all-time high of $2,882)
- R2: $2,893
- Psychological Resistance: $2,900
As the market awaits the NFP report, gold traders should remain cautious. A strong data release could spark a short-term selloff, while a weaker report could fuel another leg higher, potentially pushing gold toward $3,000 in the coming months.
