Gold Price Forecast: XAU/USD consolidates weekly gains ahead of US NFP

XAU/USD Current price: $2,357.74

• A holiday in the US keeps major pairs within familiar levels ahead of Thursday’s close.
• The United States will release the June Nonfarm Payrolls report on Friday.
• XAU/USD consolidates weekly gains and has room to extend its advance.

Gold showed no signs of life on Thursday, trading just below the $2,360 mark. A holiday in the United States (US) exacerbated the quietness in the second half of the day, leaving the bright metal consolidating weekly gains.

The US Dollar turned south after Federal Reserve (Fed) Chairman Jerome Powell cooled down his words on inflation. Despite maintaining a cautious tone, Powell said that the disinflationary trend seems to be resuming in an event organized by the European Central Bank (ECB) in Sintra. His words put pressure on the Greenback ahead of key US employment-related data.

The Bureau of Labor Statistics (BLS) will release the Nonfarm Payrolls (NFP) report on Friday, and market participants expect the US economy to have added 190K new positions in June, below the 272K gained in May. The Unemployment Rate is expected to remain steady at 4%, while Average Hourly Earnings are foreseen to be up 3.9% YoY, easing from the previous 4.1%. The figures, if confirmed, may fuel speculation of a September rate cut and push the US Dollar further south across the FX board.

XAU/USD short-term technical outlook  

Technically, the daily chart shows XAU/USD has remained confined to a tight range near its weekly high of $2,364.83, losing momentum but with the risk still skewed to the upside. The pair is developing above a flat 20 Simple Moving Average (SMA) while the 100 and 200 SMAs keep advancing below it. Technical indicators, in the meantime, remain within positive levels, although without directional strength.

In the near term, and according to the 4-hour chart, chances are of another leg north. XAU/USD develops above all its moving averages, with the 20 SMA maintaining an upward slope after crossing above the 100 and 200 SMAs. Finally, technical indicators have turned flat but hold near overbought readings without signs of upward exhaustion.

Support levels: 2,341.50 2,329.20 2,313.60

Resistance levels: 2,368.60, 2,387.60 2,400.00