Gold Price Forecast: XAU/USD balances above $1,740 as DXY extends downside, US NFP buzz


  • Gold prices have climbed above $1,740.00 comfortably amid weakness in the DXY.
  • Lower US NFP estimates and the downbeat US ISM New Orders Index are responsible for the DXY’s fall.
  • The US ISM New Orders Index reflects the forward demand by the households.

Gold price (XAU/USD) is auctioning above the crucial support of $1,740.00. The precious metal has attracted bids as the US dollar index (DXY) has surrendered more than half of Wednesday’s gains. The DXY has tumbled on lower expectations for the US Nonfarm Payrolls (NFP) and the downbeat US ISM New Orders Index data released on Wednesday.

As per the market consensus, the US economy added 270k jobs in June, higher than the former release of 390k. However, the Unemployment Rate may remain stable at 3.6%. It is worth noting that lower additions to the labor market do not resemble a slowdown in the job market. The US employment level is optimal and has less room for more jobs. However, this might trim the confidence of the Federal Reserve (Fed) in announcing extreme restrictive policy measures.

The US ISM New Orders Index landed at 55.6, significantly lower than the estimates and the prior print of 62.1 and 57.6 respectively. The corresponding data reflects the forward demand by the households and eventually, the lower New Orders Index indicates lower demand ahead.

Gold technical analysis

At the lower timeframe, the gold prices are forming an Inverted Flag that signals a continuation of a bearish momentum after a rangebound phase.  The downward sloping trendline plotted from $1,812.15 is acting as a barricade for the counter.  The declining 200-period Simple Moving Average (SMA) at $1,787.75 adds to the downside filters.  It is worth noting that the momentum oscillator, Relative Strength Index (RSI) (14) is displaying overbought signals. Also, the Moving Average Convergence Divergence (MACD) (12,29,9) is portraying exhaustion in the pullback move.

Gold intraday chart

XAU/USD

Overview
Today last price 1746.36
Today Daily Change 7.50
Today Daily Change % 0.43
Today daily open 1738.86
 
Trends
Daily SMA20 1821.18
Daily SMA50 1839.92
Daily SMA100 1888.8
Daily SMA200 1845.84
 
Levels
Previous Daily High 1772.97
Previous Daily Low 1732.27
Previous Weekly High 1841.05
Previous Weekly Low 1784.55
Previous Monthly High 1879.26
Previous Monthly Low 1802.79
Daily Fibonacci 38.2% 1747.82
Daily Fibonacci 61.8% 1757.42
Daily Pivot Point S1 1723.1
Daily Pivot Point S2 1707.33
Daily Pivot Point S3 1682.4
Daily Pivot Point R1 1763.8
Daily Pivot Point R2 1788.73
Daily Pivot Point R3 1804.5

 

 

 

 

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