Gold Price Forecast: Is XAU/USD primed for a pullback on prelim NFP Benchmark Revision?

Gold keeps printing fresh record highs, tests $3,650 while adding over 1.5% so far this week.
US Dollar mires in seven-week lows across the board ahead of the Nonfarm Payrolls Benchmark Revision.
Bets for aggressive Fed rate cuts are back on the table after poor US jobs data.
Heavily overbought RSI on the daily chart warrants caution for buyers, a pullback in the offing?

Dhwani Mehta FXStreet

Gold is testing offers above $3,650 early Tuesday as the record run remains unabated amid a sustained bearish bias in the US Dollar (USD) and a slightly positive risk tone.

Gold keeps pushing north, but for how long?

The USD resumes its downtrend following a brief recovery in Monday’s Asian trading, sitting at the lowest level in seven weeks against its six major currency rivals.

Intensifying bets over aggressive interest rate cuts by the US Federal Reserve (Fed) this year, in the face of deteriorating labor market conditions and high stagflation risks, remain a drag on the Greenback.

The dovish Fed expectations and broad USD weakness continue to power the record rally in Gold, with the non-yielding bullion up nearly 1.8% so far this week.

The Bureau of Labor Statistics (BLS) showed Friday that the headline US Nonfarm Payrolls (NFP) increased by 22,000, far below forecasts of 75,000, while the Unemployment Rate climbed to 4.3%, the highest level since late 2021.

Markets are pricing in an 89.4% chance of a 25 basis points (bps) rate cut at the Fed's September meeting and a 10.6% probability of a jumbo 50 bps rate cut, according to the CME Group's FedWatch tool.

There are speculations that the Fed could deliver more than two rate cuts this year. That said, attention now turns to the preliminary US NFP Benchmark Revision due later in the day, which will cover the period from April 2024 to March 2025.

Economists are expecting a downward revision of as much as 800,000 jobs, which could signal that the Federal Reserve is lagging in its efforts to achieve maximum employment, per Reuters.

Gold could witness a ‘sell the fact’ trade if the NFP revision is downgraded as widely expected, with sellers finding additional support from the overbought conditions on the daily chart.

Gold price technical analysis: Daily chart

The daily chart shows that the 14-day Relative Strength Index (RSI) remains in a heavily overbought zone. The leading indicator is currently above 80.

Any pullback in Gold could challenge the immediate support located at the $3,600 round number, below which the previous day’s low of $3,578 could be tested.

A sustained break below the latter will open up a fresh downside toward the $3,550 psychological mark.

However, if buyers refuse to give up, the next topside barrier is seen at the $3,700 level, above which the $3,750 region could offer some resistance.

Economic Indicator

Nonfarm Payrolls Benchmark Revision

The US Bureau of Labor Statistics (BLS) announces the preliminary estimate of the annual benchmark revision to the establishment survey employment series, which can lead to a revision as well for the Nonfarm Payrolls data in the twelve months to March. This preliminary revision could have implications for employment figures for the rest of the year.

EUR/USD holds losses near 1.1850 as US, China holidays keep trade muted

EUR/USD opens the week on a softer note, trading near 1.1860 during the Asian session on Monday. Activity is likely to remain muted, with United States markets closed for the Presidents’ Day holiday, while Mainland China is also shut for the week-long Lunar New Year break.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold remains below $5,050 despite Fed rate cut bets, uncertain geopolitical tensions

Gold edges lower after registering over 2% gains in the previous session, trading around $5,030 per troy ounce during the Asian hours on Monday. However, the non-interest-bearing Gold could further gain ground following softer January Consumer Price Index figures, which reinforced expectations that the Federal Reserve could cut rates later this year.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.