Gold price remains on track for second straight week of gains, awaits US NFP

Most recent article: Gold continues positive run as investors foresee lower interest rates 

• Gold price regains positive traction and climbs back closer to a two-week top. 
• September Fed rate cut bets undermine the USD and lend support to the metal.
• The risk-on mood might cap gains as traders gear up for the key US jobs report. 

Gold price (XAU/USD) attracts fresh buyers following the previous day's range-bound price action and climbs to the $2,365 area, or its highest level since June 21 during the Asian session on Friday. The markets have been pricing in a greater chance that the Federal Reserve (Fed) will cut in interest rates in September and again in December in the wake of the recent softer US macro data. This, in turn, drags the US Dollar (USD) lower for the fourth straight day, to over a three-week low and turns out to be a key factor lending support to the commodity. 

That said, the prevalent risk-on environment might keep a lid on any runaway rally for the safe-haven Gold price. Traders might also refrain from placing aggressive bets and prefer to wait for the release of the US monthly employment details. The popularly known Nonfarm Payrolls (NFP) report will influence market expectations about the Fed's future policy decisions. This, in turn, will drive the near-term USD demand and provide a fresh directional impetus to the precious metal, which remains on track to register gains for the second successive week. 

Daily Digest Market Movers: Gold price is underpinned by Fed rate cut bets, sustained USD selling

• Expectations for an imminent start of the Federal Reserve's rate-cutting cycle in September weigh on the US Dollar for the fourth straight day on Friday and continue to lend support to the non-yielding Gold price. 
• The market bets were lifted by this week's softer US macroeconomic releases, which pointed to signs of weakness in the labor market and a loss of momentum in the economy at the end of the second quarter.
• That said, hawkish signals from a slew of influential Fed officials, along with the minutes of the June FOMC policy meeting, suggest that policymakers were still not confident about bringing down lending costs.
• Furthermore, the underlying bullish sentiment across the global equity markets holds back traders from placing fresh bullish bets around the safe-haven precious metal ahead of the closely-watched US employment data.
• The popularly known Nonfarm Payrolls report is due for release later during the North American session and is expected to show that the US economy added 190K jobs in June as compared to the 272K previous.
• Meanwhile, the unemployment rate is anticipated to hold steady at 4%, while Average Hourly Earnings growth could see a modest dip, rising by the 3.9% yearly rate as compared to the 4.1% increase recorded in May. 
• The crucial data will play a key role in influencing market expectations about the Fed's future policy decisions, which, in turn, will drive the USD demand and provide a fresh directional impetus to the XAU/USD.

Technical Analysis: Gold price needs to find acceptance above $2,365 area before the next leg up

From a technical perspective, Wednesday's sustained breakout through the 50-day Simple Moving Average (SMA) was seen as a fresh trigger for bullish traders. Adding to this, oscillators on the daily chart have again started gaining positive traction and suggest that the path of least resistance for the Gold price is to the upside. Some follow-through buying beyond the $2,365 area will reaffirm the constructive outlook and allow the XAU/USD to reclaim the $2,400 mark. The momentum could extend further towards challenging the all-time peak, around the $2,450 zone touched in May.

On the flip side, weakness back towards the 50-day SMA resistance breakpoint, around the $2,339-2,338 region, could be seen as a buying opportunity. This is followed by support near the $2,319-2,318 area, which if broken decisively could make the Gold price vulnerable to weaken further below the $2,300 mark and test the $2,285 horizontal zone. Failure to defend the said support levels might expose the 100-day SMA, currently near the $2,258 area, and the $2,225-2,220 support before the XAU/USD eventually drops to the $2,200 round-figure mark.