Gold Price Forecast: XAU/USD erases NFP-inspired gains, returns to $1,760 area

  • Gold shot higher in the early American session on Friday.
  • 10-year US Treasury bond yield erased all of its daily gains after dismal jobs report.
  • Initial resistance aligns at $1,780 ahead of $1,787. 

Update: Following the impressive upsurge to a fresh 15-day high of $1,781, the XAU/USD pair lost its traction and pared the majority of its daily gains. At the time of press, gold was virtually unchanged on a daily basis at $1,757. The initial market reaction to the uninspiring September labour market caused US Treasury bond yields to push lower and made it tough for the greenback to find demand. However, the benchmark 10-year US T-bond yield staged a sharp U-turn and renewed multi-month highs at 1.605%, forcing XAU/USD to reverse its course. Meanwhile, the US Dollar Index registers small losses but manages to hold above 94.00. 

After spending the majority of the day near $1,760, the XAU/USD pair gathered bullish momentum in the early American session and was last seen trading at its highest level since September 22 at $1,778, rising 1.3% on a daily basis.

Following August's disappointing jobs report, the data published by the US Bureau of Labor Statistics showed on Friday the labour market struggled to recover in September. Nonfarm Payrolls (NFP) rose by 194,000 and missed the market expectation of 500,000 by a wide margin. 

Although the underlying details of the publication showed that August's print got revised higher to 366,000 from 235,000 and the Unemployment Rate declined to 4.8%, the greenback struggled to stay resilient against its rivals.

In addition to the renewed USD weakness, the sharp U-turn witnessed in US T-bond yields also provided a boost to XAU/USD. The benchmark 10-year US T-bond yield, which advanced to its strongest level since early June at 1.6% earlier in the day, is currently flat at 1.573%.

Commenting on the NFP data, "the Fed's bar for changing its mind is high," noted FXStreet Analyst Yohay Elam. "Despite high chances for the bank to print fewer dollars, there is room for the greenback to fall in the short term."

NFP Quick Analysis: Three reasons for dollar bears to party, even if tapering remains intact.

Gold technical outlook

On the four-hour chart, the Relative Strength Index (RSI) indicator is closing on the overbought territory, suggesting that the pair could have a difficult time pushing higher before staging a technical correction. Former static resistance at $1,770 now aligns as the first technical support. In case XAU/USD holds above that level, it will need to clear the 200-period SMA at $1,780 before targeting $1,787 (September 22 high).

On the flip side, a daily close below $1,770 could attract sellers. Below that level, $1,755 (100-period SMA) could be seen as the next support ahead of $1,745 (static level).


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD remains vulnerable near 1.1600 amid firmer dollar

EUR/USD is hovering around 1.1600, on the defensive amid a broadly stronger US dollar. Markets cheer US-Sino talks and stimulus progress despite looming inflation fears. The Fed-ECB monetary policy divergence weighs down on the euro. US Consumer Confidence data awaited.


GBP/USD hovers around 1.3750, Brexit talks in London eyed

GBP/USD is trading above 1.3750, struggling for a clear direction after Monday’s rebound. Market sentiment improves on stimulus hopes, US-Sino talks but the dollar remains firmer. UK’s Frost offers EU December deadline to solve the row over the NI proposal. All eyes on the Brexit talks in London.


Acceptance above 100/200-day SMAs favours XAU/USD bulls

Gold regained positive traction on Monday and inched back closer to multi-week tops. Fresh COVID-19 jitters benefitted the safe-haven metal. A stronger USD, hawkish central bank outlooks kept a lid on any meaningful upside.

Gold News

Traders book profits from Shiba Inu to push Dogecoin to $0.34

Dogecoin price could see some incoming speculative money from profit-taking in Shiba Inu A bullish close above the Cloud on the daily chart indicates future upswing likely. The outperformance of Shiba Inu is likely as Dogecoin lags the majority of the market.

Read more

Conference Board Consumer Confidence October Preview: Watch what we do... Premium

Confidence expected to slip to 108.3 from 109.3 in September. Michigan Consumer Sentiment eroded slightly in October. Sentiment seems divorced from labor market and Retail Sales. Federal Reserve taper will not hinge on a happy US consumer.

Read more