Gold Price Forecast: XAU/USD holds on to higher ground ahead of the next catalyst

XAU/USD Current price: $5,078

• The United States added 130,000 job positions in January, according to the NFP report.
• The odds for a Federal Reserve rate cut in June were wiped out by employment data.
• XAU/USD extends its consolidative phase, buyers slowly returning.

Spot Gold remains confined to a limited intraday range on Wednesday, hovering around $5,070 in the American session, ignoring the mixed US Dollar (USD) performance that followed the release of the United States (US) monthly Nonfarm Payrolls (NFP) report.

The US added 130,000 new job positions in January, almost doubling the 70,000 expected and much better than the previous monthly reading, downwardly revised to 48,000. The Unemployment Rate eased to 4.3% from 4.4%, better than expected, while the Participation rate ticked higher to 62.5%, according to the Bureau of Labor Statistics (BLS) report.

The encouraging employment figures weighed down the odds for a Federal Reserve (Fed) interest rate cut. After the dust settled, market participants fully priced in the Fed will deliver a cut in July against the June forecast. The Greenback initially rallied across the board with the headline, although it did not really affected Gold price. Stocks, in the meantime, were unable to cheer the positive figures, and major US indexes trade with a soft tone.

Further clues on what the Fed could do in the upcoming months will be unveiled on Friday, when the US will publish January Consumer Price Index (CPI) figures. If inflation rose at a faster-than-anticipated pace, the upcoming Fed Chair Kevin Warsh will have a hard time delivering lower interest rates.

XAU/USD short-term technical outlook

The 4-hour chart for XAU/USD shows that buyers are back. The 20-period Simple Moving Average (SMA) extends its advance above the 100 and 200 SMAs, with all three trending higher below the current level, keeping the near-term bias upward. The 20 SMA at $5,035.86 offers nearby dynamic support. At the same time, the Relative Strength Index (RSI) indicator ticks north at around 57, while the Momentum indicator heads nowhere just above its midline, maintaining a neutral stance. Immediate resistance aligns at $5,092.00, followed by $5,598.25. A sustained break above the first barrier could extend the advance toward the next objective.

The daily chart shows XAU/USD briefly surpasses the $5,092 level, but it is still battling to clear it up. Still, the overall bias is positive, as the pair develops above all its moving averages. The 20-day SMA maintains its almost vertical slope far above the 100- and 200-day SMAs, while providing relevant support at around $4,934. Finally, the Momentum indicator aims modestly lower above its midline, while the RSI indicator stands at 58, heading marginally higher, in line with the lack of a dominant trend while reflecting the ongoing absence of follow-through.

(The technical analysis of this story was written with the help of an AI tool.)