Gold Price Forecast: XAU/USD aims to extend recovery above $1,720 as focus shifts to US NFP
|- Gold price has resumed its upside journey after a pullback to near $1,700.00.
- Escalating Japan-North Korea tensions are turning the risk-profile wheel to the negative side.
- After bumper US ADP data, upbeat NFP numbers would soar the odds of a 75 bps rate hike further.
Gold price (XAU/USD) has turned sideways after sensing demand around the critical support of $1,700.00. The precious metal is aiming to cross the $1,720.00 hurdle and will find its next barricade around $1,730.00. The yellow metal is holding its gains while the market sentiment is turning negative on escalating tensions between Japan and North Korea.
The option of announcing a third consecutive 75 bps rate hike by the Federal Reserve (Fed) is getting votes now. Earlier, the San Francisco Fed President Mary Daly said that inflation remains high, adding that more rate hikes are needed. She emphasized that the Fed is “resolute” on raising rates further to bring inflation down.
Apart from that, upbeat payroll data dictated that the pace of hiring by the corporate is not slowed down yet. The US Automatic Data Processing (ADP) data reported higher at 208k vs. the prior release of 200k. Also, a better-than-projected US ISM non-manufacturing gamut is hinting that the overall demand is still solid.
On Friday, the release of the US Nonfarm Payrolls (NFP) will display a true picture of the labor market status. As per the consensus, the economy has added 250k fresh jobs lower than the reading of 315k reported for August.
Gold technical analysis
Gold prices have bounced back sharply after sensing a significant buying interest around the horizontal support placed from October 10 high at $1,702.62. The 200-period Exponential Moving Average (EMA) has acted as major support for the counter. Also, the termination of a corrective move to near $1,700.00 has pushed the gold prices back above the 50-EMA at around $1,714.00.
Meanwhile, the Relative Strength Index (RSI) (14) is hovering around 60.00 and is looking to establish above the same.
Gold intraday chart
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