Gold Price Forecast: XAU/USD to post additional gains with daily close above $1,800

The XAU/USD pair closed in the positive territory on Wednesday and preserved its bullish momentum on Thursday. As of writing, the pair was trading in the upper half of its weekly range, rising 0.25% on the day at $1,791.

The selling pressure surrounding the greenback is allowing XAU/USD to edge higher. Reflecting the broad-based USD weakness, the US Dollar Index is losing 0.25% at 91.03. On the other hand, the 10-year US Treasury bond yield, which lost nearly 4% in the first half of the week, is staging a rebound and limiting gold's gains for the time being.

The data published by the US Department of Labor revealed on Thursday that the weekly Initial Jobless Claims declined to the lowest level since the beginning of the pandemic at 498,000. This reading came in better than the market expectation of 540,000 but failed to help the USD find demand as investors remain on the sidelines ahead of Friday's key jobs report.

Nonfarm Payrolls (NFP) in the US is expected to increase by 978,000 in April. Furthermore, analysts see the Unemployment Rate edging lower to 5.8% from 6% in March. Market participants will also pay close attention to the Average Hourly Earnings, as stronger-than-expected wage inflation could provide a boost to T-bond yields and force gold to reverse its direction.

Gold technical outlook

The Relative Strength Index (RSI) indicator on the daily chart is inching higher on Thursday. However, gold may need to make a daily close above $1,800, where the 100-day SMA is currently located, in order to attract buyers. Above that level, $1,820 (Fibonacci 50% retracement of the January-March downtrend) aligns as the next target ahead of $1,840 (static level). 

On the flip side, the near-term outlook could turn bearish if gold violates the 20-day SMA at $1,770. $1,755 (static level) could act as interim support before $1,740 (50-day SMA/Fibonacci 23.6% retracement).