Gold Price Forecast: XAU/USD declines towards $1,700 on hawkish Fed bets, US NFP eyed

Gold price is expected to extend its weakness to near $1,700.00 on hawkish Fed bets.
A decline in US ADP employment data failed to weaken the DXY.
The US NFP is seen lower at 300k vs. 528k reported earlier.

Sagar Dua FXStreet

Gold price (XAU/USD) has displayed a less-confident pullback after hitting a fresh monthly low of $1,709.67 in the late New York session. The precious metal is expected to decline further to near the psychological support of $1,700.00 as investors ignore the weaker employment generation numbers and focus on more restrictive monetary policy by the Federal Reserve (Fed).

Ahead of more comprehensive and considered US Nonfarm Payrolls (NFP) data, the unconventional US Automatic Data Processing (ADP) has reported 132k new job additions in August in the private sector, much lower than the expectations of 288k. Investors were already expecting a fall in employment generation as big tech boys announced a halt in recruitment or retrenchment at a conference call after the release of second-quarter results.

Going forward, the mega event of US NFP is expected to land at 300k lower than the prior release of 528k. Also, the Unemployment Rate is expected to remain unchanged at 3.5%. As bringing price stability is the foremost priority of the Fed, a softening labor market cannot change Fed policymakers' conviction towards hiking interest rates.

Gold technical analysis

Gold prices are declining firmly towards the monthly lows at $1,680.91, recorded on July 21. The 20-and 50-period Exponential Moving Averages (EMAs) at $1,726.40 and $1,738.32 respectively are scaling towards the south, which adds to the downside filters.

Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates more weakness ahead.

Gold four-hour chart

XAU/USD

Overview
Today last price	1711.06
Today Daily Change	-12.94
Today Daily Change %	-0.75
Today daily open	1724

Trends
Daily SMA20	1765.83
Daily SMA50	1761.6
Daily SMA100	1815.76
Daily SMA200	1836.44

Levels
Previous Daily High	1740.6
Previous Daily Low	1721.21
Previous Weekly High	1765.51
Previous Weekly Low	1727.87
Previous Monthly High	1814.37
Previous Monthly Low	1680.91
Daily Fibonacci 38.2%	1728.62
Daily Fibonacci 61.8%	1733.19
Daily Pivot Point S1	1716.61
Daily Pivot Point S2	1709.21
Daily Pivot Point S3	1697.22
Daily Pivot Point R1	1736
Daily Pivot Point R2	1747.99
Daily Pivot Point R3	1755.39

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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