Gold hits a four-week high as attention shifts to US nonfarm payrolls

The price of gold is up 0.35% as investors seek safety in the face of potential US tariffs and rising British gold yields.
Fed officials deliver mixed signals on the path of interest rates during a tranquil session.
Market attention is focused on upcoming U.S. nonfarm payrolls data and consumer sentiment metrics for further economic signals.

The price of gold rose for a third straight day, rising 0.35% on safe-haven demand fueled by concerns over Donald Trump’s proposed policies as the United Kingdom (UK) grappled with a budget crisis. At the time of writing, the XAU/USD rate is USD 2,671.

On Wednesday, CNN revealed that United States (US) President-elect Donald Trump may consider declaring a national economic emergency, which would provide him with legal justification to impose tariffs on US adversaries and allies. Earlier on Thursday night, the yield on British gold at the long end of the curve rose sharply above 5%, its highest level since 1998.

Meanwhile, Federal Reserve (Fed) officials are making headlines as US financial markets remain closed amid national mourning for former US President Jimmy Carter.

Fed Governor Michelle Bowman maintained a hawkish stance, saying the central bank should be cautious when adjusting interest rates, while Jeffrey Schmid of the Kansas City Fed added that rates were “almost” neutral.

Earlier, Philadelphia Fed representative Patrick Harker revealed that the US central bank may hold off due to uncertainty, while Susan Collins from Boston said that the current outlook suggests a gradual approach to interest rate cuts.

This week, investors are closely awaiting the release of December US nonfarm payrolls data and consumer sentiment from the University of Michigan (UoM).

Daily Market Change Summary: Gold and US Dollar are rising slightly

The gold price shrugs off higher U.S. real yields, which rose two basis points to 2.29%. At the same time, the yield on 10-year US T bonds remains unchanged at 4.691%
The US Dollar Index (DXY), which tracks the dollar’s value against a basket of six currencies, rose 0.16% to 109.18.
More data from the labor market were published. The US Challenger Jobs report for December showed a significant decline in layoffs, with employers cutting 38,792 jobs compared to 57,727 in November.
The Federal Reserve’s moderating expectations continued to decline. The December Fed Funds futures contract prices an easing of monetary policy by 54 basis points.
The minutes of the December FOMC meeting indicated that the central bank was close to the point where it would be appropriate to sluggish the pace of monetary easing. Participants indicated that if the data are in line with expectations, “monetary policy easing should continue.”
On Wednesday, the World Gold Council said exchange-traded funds backed by physical gold recorded their first inflow in four years.

XAU/USD Technical Outlook: Gold price rises above $2,650 as bulls emerge

The gold price continues to rise, making a series of higher and higher lows after bouncing off the 50-day elementary moving average (SMA) of $2,646, causing XAU/USD to jump towards the $2,670 area.

As it continues to strengthen, gold’s first resistance will be at $2,700, followed by the December 12 high of $2,726 and the all-time high (ATH) of $2,790.

On the other hand, if sellers push XAU/USD below the 50-day SMA, the path will open to test the 100-day SMA at $2,630. If breached, the next key support level would be $2,600, with further losses potentially extending to the 200-day SMA at $2,500.