Gold Price Forecast: XAU/USD defends $3,500 pivotal support ahead of US data

Gold (XAU/USD) attracts heavy intraday selling on Thursday and retreats from the record high, around the $3,578-3,579 region touched the previous day. A surge in global bond yields this week shifted focus again to rising debt levels across major economies. The worries now seem to have subsided, which is evident from a sense of calm around the financial markets and prompts some profit-taking around the safe-haven commodity amid overbought conditions.

Meanwhile, the US Dollar (USD) holds steady as traders opt to wait for more cues about the Federal Reserve's (Fed) rate-cut path and turns out to be another factor that undermines the Gold price. Hence, the market focus will remain glued to the release of the closely-watched US monthly employment details. The popularly known Nonfarm Payrolls (NFP) report will play a key role in influencing the near-term USD price dynamics and determining the next leg of a directional move for the commodity.

In the meantime, the growing acceptance that the US central bank will lower borrowing costs later this month and deliver at least two 25-basis-point rate cuts by the end of this year acts as a headwind for the USD. Moreover, trade uncertainties assist the Gold price to pare intraday losses. In fact, US President Trump on Tuesday said his administration would seek an immediate hearing from the Supreme Court in hopes of overturning a federal appeals court's ruling deeming most of his tariffs illegal.

Traders now look forward to Thursday's US economic docket – featuring the ADP report on private-sector employment, the usual Weekly Initial Jobless Claims, and the ISM Services PMI – for some impetus later during the North American session. The immediate market reaction to the data, however, is more likely to be muted as traders might opt to wait for the release of the official jobs report on Friday. Nevertheless, the fundamental backdrop warrants some caution for the XAU/USD bears.

Gold daily chart

Technical Outlook

From a technical perspective, the intraday corrective pullback stalls near the 23.6% Fibonacci retracement level of the recent rally from the vicinity of the $3,300 mark, or the 100-day Simple Moving Average (SMA) pivotal support. The subsequent move up favors the XAU/USD bulls, though the $3,560 area might now act as an immediate hurdle. Some follow-through buying will set the stage for a move towards retesting the all-time peak, around the $3,578-3,579 region, before the Gold price aims to conquer the $3,600 mark.

On the flip side, the daily swing low, around the $3,510 area, or the 23.6% Fibo. level, might continue to act as an immediate support. Any further pullback might be seen as a buying opportunity and remain cushioned near the $3,440 region. The latter represents a multi-month-old trading range hurdle, which, if broken, will suggest that the Gold price has topped out and shift the near-term bias in favor of bearish traders.