Gold Daily | Spot Gold Drops Below $2500 Amid Mixed U.S. Payroll Data and Fed Rate Cut Uncertainty

【Latest Gold Price and Recent Trends】

On Friday, spot gold prices fell significantly by nearly $20, closing below $2500 per ounce at $2497.25. The drop was driven by mixed U.S. non-farm payroll data, causing doubts about the Federal Reserve's rate cut scale this month.

【Technical Analysis】

Gold prices have broken short-term support at $2500 per ounce. If prices stay below this level, the next support could be at $2440 and then $2400. On the upside, resistance is at $2530, with potential to target $2600 if cleared. Further, Economies.com indicated that falling below $2483.40 could add bearish pressure, potentially dropping to $2445.

【Market Sentiment and Economic Background】

Recent mixed non-farm payroll data showed 142,000 new jobs in August, lower than the expected 165,000, and July's number was revised down to 89,000. However, the unemployment rate fell to 4.2% from 4.3%. This ambiguity left markets debating whether the Fed would cut rates by 25 or 50 basis points. Lower rates decrease the opportunity cost of holding non-yielding gold, enhancing its investment appeal. Traders are also awaiting U.S. inflation data, which could further influence gold prices. Additionally, geopolitical tensions in the Middle East and Russia's increasing gold purchases highlight gold's appeal as a safe-haven asset.

【Analyst Opinions】

Citigroup's Aakash Doshi and Wall Street Journal's Nick Timiraos suggest the mixed payroll report leaves the market split on the Fed's rate cut decision. Analysts like FXStreet's Eren Sengezer and Economies.com predict key inflation data and geopolitical events will significantly impact gold. ING economists believe weaker-than-expected jobs data could lead to a 50 basis points rate cut by the Fed, exerting downward pressure on the dollar and boosting gold.