Gold Price Forecast: XAU/USD prepares for a fresh downside to near $1,700 as US NFP hogs limelight

Gold price is set for fresh selling as Fed declares no bar on interest rates.
As per market estimates, the US economy generated 290k jobs in August.
The gold prices have slipped below the 61.8% Fibo retracement placed at $1,729.35.

Sagar Dua FXStreet

Gold price (XAU/USD) is displaying a less-confident pullback move after printing a fresh monthly low of $1,723.44 in the Tokyo session. The precious metal is expected to remain in a negative trajectory for a prolonged period as the Federal Reserve (Fed) chose price stability over growth at Jackson Hole Economic Symposium on Friday.

Inflationary pressures displayed signs of evidence that stated a limited luxury to the Fed to slow down the pace of hiking interest rates in August. While US economic activities displayed a meaningful slowdown due to lower liquidity in the economy. Considering the dual situation, market veterans were expecting that the Fed will trim the velocity of hiking interest rates to spur economic activities. However, the Fed chose to bring price stability as their foremost priority.

Going forward, the US Nonfarm Payrolls (NFP) data will be of utmost importance. The economic data is expected to land at 290k, lower than the prior release of 528k. Investors should not consider the decline in job creation as a major issue. The US economy is operating at full-employment levels for around six months, therefore, more room for job creation has been trimmed significantly.

Gold technical analysis

On an hourly scale, the gold prices have slipped below the 61.8% Fibonacci retracement (placed from July 21 low at $1,680.91 to August 10 high at $1,807.93) at $1,729.35. Declining 20-and 50-period Exponential Moving Averages (EMAs) at $1,738.08 and $1,745.84 adds to the downside filters. Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which signals more weakness ahead.

Gold four-hour chart

XAU/USD

Overview
Today last price	1726.7
Today Daily Change	-11.12
Today Daily Change %	-0.64
Today daily open	1737.82

Trends
Daily SMA20	1769.4
Daily SMA50	1765.76
Daily SMA100	1820.16
Daily SMA200	1837.39

Levels
Previous Daily High	1758.94
Previous Daily Low	1734.2
Previous Weekly High	1765.51
Previous Weekly Low	1727.87
Previous Monthly High	1814.37
Previous Monthly Low	1680.91
Daily Fibonacci 38.2%	1743.65
Daily Fibonacci 61.8%	1749.49
Daily Pivot Point S1	1728.37
Daily Pivot Point S2	1718.91
Daily Pivot Point S3	1703.63
Daily Pivot Point R1	1753.11
Daily Pivot Point R2	1768.39
Daily Pivot Point R3	1777.85

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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