Gold Price Forecast: XAU/USD advances towards $1,730 despite a rebound in DXY, US NFP buzz

Gold price is marching towards the critical hurdle of $1,730.00 ahead of US NFP data.
A marginal decline in odds for a 75 bps rate hike has supported the gold bulls.
The Fed's long spell of rate hikes is responsible for lower US NFP projections.

Sagar Dua FXStreet

Gold price (XAU/USD) has extended its gains above the immediate hurdle of $1,720.00 and is aiming to test a three-week high at around $1,730.00. The precious metal is scaling higher gradually as the US dollar index (DXY) has displayed a subdued performance. A rebound has been witnessed in the DXY after refreshing the day’s low around 110.80 but the soaring market mood will keep a lid over the DXY bulls.

The 10-year benchmark US Treasury yields have fallen below 3.75% amid a minor decline in bets for a 75 basis point (bps) interest rate hike by the Federal Reserve (Fed). Per the CME Fedwatch tool, the probability of 67.8% for a three-quarter-to-a-percent rate hike, recorded in early Tokyo, has slipped to 64.7% in the early European session.

Wednesday’s upbeat US ISM Non-Manufacturing PMI data and US Automatic Data Processing (ADP) Employment figures brought a significant rally in the DXY but have turned subdued ahead of US Nonfarm Payrolls (NFP) data. The payroll data is expected to decline to 250k vs. the former release of 315k. The spell of rate hikes by the Fed has forced the corporate to postpone their capacity expansion plans, resulting in weaker consensus for the labor additions data.

Gold technical analysis

On an hourly scale, gold prices are marching towards the 61.8% Fibonacci retracement (from August 10 high at $1,807.93 to September low at $1,614.85) at $1,734.58. The 200-period Exponential Moving Average (EMA) at $1,697.00 has tilted towards the north, which indicates more upside ahead.

Meanwhile, the Relative Strength Index (RSI) (14) has picked demand at 60.00, which indicates that the market participants have capitalized on the pullback move for creating longs.

Gold four-hour chart

XAU/USD

Overview
Today last price	1723.93
Today Daily Change	7.68
Today Daily Change %	0.45
Today daily open	1716.25

Trends
Daily SMA20	1679.72
Daily SMA50	1724.38
Daily SMA100	1762.48
Daily SMA200	1823.19

Levels
Previous Daily High	1727.85
Previous Daily Low	1700.53
Previous Weekly High	1675.49
Previous Weekly Low	1614.85
Previous Monthly High	1735.17
Previous Monthly Low	1614.85
Daily Fibonacci 38.2%	1710.97
Daily Fibonacci 61.8%	1717.41
Daily Pivot Point S1	1701.9
Daily Pivot Point S2	1687.56
Daily Pivot Point S3	1674.58
Daily Pivot Point R1	1729.22
Daily Pivot Point R2	1742.2
Daily Pivot Point R3	1756.54

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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