Gold rises to the $4,100 level, looking to FOMC minutes for guidance.

On Wednesday, gold (XAU/USD) made gains for the second consecutive day, building on its recovery from just below the $4,000 mark, which was a low not seen in about a week and a half. This uptick has propelled bullion prices toward the higher end of the weekly range. Currently, traders are hopeful for a consistent move above the $4,100 threshold. However, the impending FOMC meeting today is casting a shadow, potentially influencing future price movements.

In related news, Thursday’s delayed Non-Farm Payroll (NFP) report is highly anticipated, as it may offer insights into the US Federal Reserve’s strategies for rate cuts, something that could affect the appeal of non-yielding gold. At the same time, anxiety surrounding the U.S. economy has caused the dollar (USD) to drop from a week-long peak, which might benefit gold as a safe-haven asset. Yet, the overall situation remains rather troubling for gold enthusiasts.

Daily Digest Market Movement: Gold benefits from safe-haven demand recovery and slight dollar decline

• Investor worries over a slowing economy, exacerbated by the longest U.S. government shutdown on record, continue to dampen sentiment and support gold prices through Asian trading on Wednesday.
• Ukraine’s military reported on Tuesday that it utilized U.S.-supplied ATACMS missiles to target sites within Russia. Amid ongoing conflict, Ukrainian President Volodymyr Zelenskiy plans to meet in Turkey to revive faltering peace discussions with Russia.
• U.S. special envoy Steve Witkoff is expected to join the discussions, though Kremlin spokesman Dmitry Peskov has stated that the Russian team will not participate, adding to geopolitical tensions, which in turn bolster gold’s appeal.
• The dollar has had difficulty attracting buyers, remaining near a week-high despite waning dovish sentiment from the Federal Reserve. Recently, several Fed officials have expressed hesitation regarding further monetary easing next month.
• Fed Vice Chairman Philip Jefferson remarked earlier this week that the Fed should maintain a cautious approach. However, Fed Director Christopher Waller has been advocating for additional rate cuts, pointing to fears about the labor market’s stability.
• The U.S. Department of Labor revealed that the count of individuals receiving unemployment benefits after the first week of aid surged to 1.957 million for the week ending October 18, indicating an uptick in the unemployment rate for October.
• Consequently, all attention will be on the postponed September NFP report due on Thursday. This release, alongside the FOMC minutes coming out later today, could offer essential clues about the Fed’s rate adjustment plans, thus impacting both the USD and the XAU/USD pair.

Gold bulls are looking for consistent strength above $4,100 before making new positions

Gold found solid support on Tuesday and rebounded from the 200-period exponential moving average (EMA) on the 4-hour chart. However, the chart shows a mixed bag of oscillators, so caution is advised before making any new trades. The $4,100 level seems to pose an immediate challenge, but if surpassed, it could trigger a short-covering rally pushing prices toward the next challenge around $4,152-$4,155, eventually aiming for the $4,200 zone.

On the flip side, the area around $4,037-4,036 may offer some immediate downside protection leading up to the 200-period EMA, which is currently just below the $4,000 threshold. A decisive drop below this point could accelerate the decline, driving prices towards the support level at $3,931, potentially leading down to $3,900 and the late October lows around $3,886.