GLD ETF analysis: Gold price moderate momentum to define short-term path

Fresh signs of resilience in the US labor market have curbed GLD gold price gains even as the persistent uncertainties offer steady support to the precious metal. At the time of writing, the bullion was trading at $4,163 an ounce amid heightened bets for a 25 basis point rate cut by the Fed in December.

Rate cut expectations offset signs of a resilient US job market

GLD gold price held steady above $380 on Wednesday after breaking past that level in the previous session. However, the leading ETF remained range-bound as lower trading volume is expected for the remainder of the week due to the US Thanksgiving celebrations.

Concerns over the health of top economies have sustained the bullion’s safe-haven appeal, with gold ETFs being a preferred investment option for numerous institutions and individual investors. Expectations of a dovish Fed have further fueled the recorded gains.

On the one hand, some Fed officials perceive a December rate cut as not being appropriate. In fact, this sentiment was captured in the recently released Fed minutes. However, remarks by the dovish Fed Governor Christopher Waller have boosted bets for further rate reduction before the year ends. According to the policymaker, the US job market is weak enough to warrant a 25-basis point cut during the highly anticipated December meeting. 

Notably, gold and other precious metals benefit from lower interest rates. Besides, the market is digesting talks on a new Fed Chair who would lean towards Trump’s interests. In fact, some expect the US President to name his pick for the crucial position by Christmas.

Meanwhile, Treasury yields eased their recent losses with the benchmark 10-year Treasury yield edging higher on Wednesday. This is after the released initial jobless claims data, which came in below experts’ expectations at 216,000 for the week that ended on 22nd November. 

The figures highlighted the US job market’s resilience; an aspect that boosted Treasury yields at the expense of the non-yielding bullion. Investors continue to look for further cues on the health of the economy and the subsequent move by the US central bank.

GLD ETF technical analysis

GLD ETF chart | Source: TradingView

The SPDR Gold Shares, a leader in gold ETFs, continues to trade within a rather tight range even as the bulls remain in control. A look at its daily chart shows a relative strength index (RSI) of 59, which points to moderate bullish momentum. Besides, the ETF has held steady above the short-term 25-day EMA, which has converged with the middle Bollinger band.

Based on the technicals and fundamentals, GLD gold price will likely record subtle gains in the near term. More specifically, the range between the 25-day EMA at 4375 and the upper Bollinger band at $387 will be worth watching. 

Even with the possible rebound past that resistance level, the bulls will likely lack enough buyers to retest the all-time high hit in October. That rallying would likely be curbed slightly below at $397. On the lower side, this thesis will be invalidated by a pullback below the support level of $370.