Gold Price Forecast: XAU/USD shines on upbeat mood, soft US jobs data

• Gold prices rebound sharply from weekly lows, marking a 0.43% increase as traders digest the latest U.S. jobless claims report.
• A divided Federal Reserve and the anticipation of Chairman Powell's speech keep investors on edge, with a dovish tilt currently in the lead.
• The geopolitical tensions following the Hamas attack and subsequent Israeli military actions contribute to the safe-haven asset's appeal.

Gold price (XAU/USD) rebounds in early morning trading during the North American session, bounces from weekly lows of $1944.80, prints solid gains of 0.43%, and exchanges hands at $1958.00.

XAU/USD climbs to $1958 amid mixed Fed signals and a cautious bond yield recovery

Market sentiment is positive, with Wall Street shrugging off a solid employment report. Initial Jobless Claims revealed by the US Bureau of Labor Statistics (BLS) slowed to 217K last week, below expectations for a 218K increase and below the previous reading of 220K, snapping three weeks of consecutive exceeding previous numbers.

Meanwhile, US Treasury bond yields remain adrift to interest rate expectations and the Federal Reserve’s commentary. The split amongst Fed officials between saying that rates are already restrictive and the need for additional hikes is growing. Nevertheless, the doves appear to have the upper hand so far unless next week’s inflation report takes them off guard, along with market participants estimating the first rate cut toward the second half of 2024. In that regard, Fed Chairman Jerome Powell will cross the wires later at 19:00 GMT.

US Treasury bond yields halted their last week plunge and are climbing but failing to weigh on Gold prices. The US 10-year benchmark note increases five basis points (bps) up to 4.553%. On the other hand, the Greenback remains on the defensive, losing 0.02%, as shown by the US Dollar Index (DXY) sitting at 105.50.

Investors see 91% odds the Fed would keep rates unchanged, while the firs cut is foreseen at June 2024, with chances lying at 42%.

XAU/USD rallied since October 9, due to the Hamas attack on Israel, which escalated to a conflict that witnessed the Israeli army entering the Gaza Strip while the international community looked for a peaceful exit to the hostilities.

 XAU/USD Price Analysis: Technical outlook

Gold’s daily chart portrays the yellow metal as neutral to upward biased despite dipping below the 20-day moving average (DMA), which sits at $1969.33. Once buyers reclaim the latter, XAU/USD’s uptrend could resume, as the $2000 figure would emerge as the next resistance. A breach of the latter would expose October’s high at $2009.42. On the other hand, if XAU/USD stays below $1970, XAU/USD could slip further and test the 200-DMA at $1934.70 before challenging the 100-DMA at $1926.84.