Gold Price Forecast: XAU/USD remains confined around $1,985, focus on the US NFP

Gold price (XAU/USD) consolidates around $1,985 during the early Sian session on Friday. A fall in the US Treasury bond yield and the softer US Dollar (USD) support the positive momentum in the yellow metal. However, market players might turn cautious ahead of the highly anticipated US Nonfarm Payrolls (NFP) on Friday, which are expected to show an increase of 180,000 jobs in October.

Meanwhile, the US Dollar Index (DXY), the value of the USD relative to a basket of global currencies, hovers around 106.17 after bouncing off the weekly low of 105.81. The US Treasury bond yields edge lower, with the 10-year Treasury yield standing at 4.663%, the lowest level since October 13.

Markets are confident that the Federal Reserve (Fed) is approaching the end of its tightening cycle after Fed Chair Jerome Powell made it clear that financial conditions will need to remain tight to avoid further rate rises. This, in turn, weighs on the Greenback and supports USD-denominated gold.

On the other hand, the downbeat Chinese data might cap the precious metal’s upside as China is the world's largest gold producer and consumer. Traders await China’s Caixin Services PMI for October. The weaker-than-estimated data would add doubt about the recovery in the world’s second-largest economy. Earlier this week, the nation’s Caixin Manufacturing PMI fell to 49.5 in October versus 50.6 prior, worse than the expectation of a 50.8 rise.

The attention on Friday will be on the US Nonfarm Payrolls data. Also, the Unemployment rate and Average Hourly Earnings for October will be released. Traders will take cues from the data and find trading opportunities around the gold price.