Gold Price Forecast: XAU/USD slides toward $1,800 ahead of US job data

Update: Gold prices continue to struggle near $1,800 on Friday after the Fed official’s hawkish comments boost the demand for the US dollar. The US Dollar Index (DXY) remains strong above 92.33 with 0.09% gains. The growing possibility of a sooner-than-expected policy tightening after a number of Fed official’s starts to talk about the tapering measures enhances the attractiveness of the greenback. The higher US dollar value makes the precious metal expansive for the other currencies holders. Gold prices might continue to experience choppy trade as being sensitive to the economic numbers, central bank comments as well as the coronavirus-pandemic situation. The Exchange Traded Fund (ETF) flows remain weak, which signifies investors anxiousness. The SDPR Gold Trust holdings, which is the world’s largest gold-backed exchange-traded fund, fell to 1,027.61 tonnes on Thursday. Investors keep their eye on the US Nonfarm Payroll data to gauge the market sentiment.

Gold (XAU/USD) remains offered around $1,801, down 0.18% intraday, while keeping the break of key support during Friday’s Asian session. While strong rebound of the US Treasury yields and record equities weighed on the metal prices the previous day, firmer US dollar and cautious mood seem to favor sellers of late.

Market’s mood brightened on Thursday amid chatters over US Senators’ nearness to announcing the much-awaited infrastructure spending plan, which ultimately disappointed traders recently after the policymakers pushed back the votes to the weekend. As per the latest update from Reuters, “US Senate Majority Leader Chuck Schumer moves to close debate on $1 trillion infrastructure package; unclear when Senate will vote on passage.”

Also previously favoring the risk takers were surprise positive of the US jobless claims data after multiple weekly rises in the claims. However, the impending fears of tapering and disappointment from ADP Employment Change, an early signal for today’s US Nonfarm Payrolls (NFP), reverse the optimism.

It should be noted that the multi-day high of the coronavirus numbers from the US, China and Australia also challenge the market sentiment and exert downside pressure on gold prices, underpinning the US dollar’s safe-haven demand.

Read: Covid fears are mounting in APAC

Amid these plays, S&P 500 Futures and stocks in Asia-Pacific remain heavy whereas the US 10-year Treasury yields rise 1.8 basis points (bps) after jumping the most in 12 days. Further, the US Dollar Index (DXY) adds 0.10% gains on a day while picking up the bids to 92.35 by the press time.

Given the risk-off mood and the firmer USD, gold may remain pressured ahead of the key US employment data. However, any disappointment from the jobs report can reverse the metal’s latest losses.

Forecasts suggest 870K of NFP versus 850K prior whereas the Unemployment Rate is likely to drop to 5.7% from 5.9%. These numbers should help the recently hawkish Fed policymakers to back the tapering tantrums and weigh on the gold prices if matched or surpassed.

Technical analysis

Gold’s sustained break of an ascending trend line from June 29 and 100-DMA keeps sellers hopeful amid the downward sloping Momentum line and receding bullish bias of MACD signals. Also favoring the metal sellers is the repeated failures to cross the 50-DMA.

For now, bears are en route to a four-month-old ascending support line, near $1,782. However, multiple levels surrounding $1,791 may test the downtrend.

It should be noted that the metal’s weakness past $1,782 will not hesitate to challenge June’s low near $1,750.

Meanwhile, corrective pullback beyond the 100-DMA and support-turned-resistance, near $1,806-08, will be challenged by the 50-DMA level of $1,820.

If at all the gold buyers keep the reins past $1,820, mid-July tops surrounding $1,835 will test the further upside.

Gold: Daily chart

Trend: Further weakness expected


Today last price 1801.2
Today Daily Change -3.28
Today Daily Change % -0.18%
Today daily open 1804.48


Daily SMA20 1810.7
Daily SMA50 1821.78
Daily SMA100 1804.16
Daily SMA200 1819.13


Previous Daily High 1814.94
Previous Daily Low 1797.87
Previous Weekly High 1832.77
Previous Weekly Low 1792.65
Previous Monthly High 1834.17
Previous Monthly Low 1765.74
Daily Fibonacci 38.2% 1804.39
Daily Fibonacci 61.8% 1808.42
Daily Pivot Point S1 1796.59
Daily Pivot Point S2 1788.69
Daily Pivot Point S3 1779.52
Daily Pivot Point R1 1813.66
Daily Pivot Point R2 1822.83
Daily Pivot Point R3 1830.73


This site uses Akismet to reduce spam. Learn how your comment data is processed.

Inline Feedbacks
View all comments