XAU/USD is grinding north above $2,620

XAU/USD Current Price: $2,621.68

• US employment figures are reviving concerns about the health of the sector.
• Wall Street opened mixed, with only the S&P500 trading in the green.
• The short-term picture of XAU/USD shows that buyers continue to hesitate.

The price of gold bounced back after approaching the $2,600 mark, now trading around the $2,620 level. The US dollar saw a short-lived rise after the release of data from the United States (US), which opposed the needs of the Federal Reserve (Fed).

On the one hand, inflation in September was warmer than anticipated. The annual consumer price index (CPI) rose 2.4%, down from the previous 2.5% but higher than the 2.3% estimate. The annual core CPI rose 3.3%, above August’s reading and market forecasts of 3.2%. On a monthly basis, the CPI rose 0.2% versus the 0.1% expected by market participants. On the other hand, initial jobless claims for the week ended Oct. 4 rose to 258,000, worse than the 230,000 expected.

After the dust settled, however, market participants understood that the numbers were hardly enough to affect future Federal Reserve (Fed) decisions. The US dollar dipped between gains and losses, but appears to be slowly recovering its upbeat pace. US stock markets, meanwhile, are struggling for direction. Following the upbeat performance of Asian and European indexes, only the S&P500 posted gains.

Looking ahead, market participants will have to wait for the US data scheduled for next week as well as the monetary policy announcement by the European Central Bank (ECB).

XAU/USD Short Term Technical Outlook

Technically, the daily chart for the XAU/USD pair shows that the advance may resume soon. After falling below a still-bullish 20 simple moving average (SMA), gold aims to bounce back above it. Meanwhile, the 100 and 200 SMAs maintain bullish slopes well below current levels. Finally, the Momentum indicator is hovering around its 100 line, losing some of its bearish power, while the Relative Strength Index (RSI) indicator has risen and is currently around 55.

The short-term picture is still bearish. XAU/USD is meeting sellers around the 20 SMA, which extends its slide below a slightly bullish SMA of 100. Technical indicators, meanwhile, are offering neutral bearish slopes while developing below their median lines. At this point, a steeper decline below $2,600 seems unlikely, but the chances of a firmer near-term advance are still low.

Support levels: 2,603.90 2,589.10 2,575.20

Resistance levels: 2,625.40 2,637.10 2,652.90