Gold steadies after Fed officials downplay rate hike urgency

FUNDAMENTAL OVERVIEW

After Fed's Williams and Jefferson delivered dovish remarks that played down the need for an October rate increase, gold began to consolidate above the 4,140 level.

The comments underscore the Fed's limited appetite for tightening, a stance already implied by the September dot plot. If the central bank remains more dovish than markets expect, gold could gain support, as real yields might fall when inflation expectations rise faster than nominal yields.

The US nonfarm payrolls report is due later today. Given the Fed officials' dovish tone, only an exceptionally strong NFP that beats forecasts across all metrics would likely revive expectations of an October hike. Such an outcome could weigh on gold in the short term due to a hawkish repricing.

Conversely, data that matches or falls short of expectations would probably support gold, extending the recent pullback.

GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME

Gold is gradually nearing a descending trendline. Sellers are expected to lean on that trendline, with a stop above it, targeting a drop to the 3,885 level. Buyers, on the other hand, want a break above the trendline to fuel a rally toward 4,700 next.

GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

From the 4-hour perspective, limited signals are clear, though sellers have a favorable risk/reward near the trendline and the 4,240 resistance. Buyers need a breakout to open the door for new highs, with 4,400 as the first target.

GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

At the 1-hour timeframe, a minor support exists around the 4,140 level, a zone that has repelled price several times recently. If another pullback occurs, buyers are likely to step in near that support, with a stop below, continuing to aim for the descending trendline. Sellers, conversely, look for a breakdown to add bearish bets targeting 3,885. The red lines define the average daily range for today.

UPCOMING CATALYSTS

The week concludes with the US nonfarm payrolls report today.