Gold Price Forecast: XAU/USD to test $1720 on a break below $1750

In the lead-up to the much-awaited US Nonfarm Payrolls (NFP) showdown, gold is licking its wounds after the previous decline, although it remains in a familiar range above $1750. In the view of FXStreet’s Dhwani Mehta, XAU/USD’s path of least resistance appears down.

See – Gold Price Forecast: XAU/USD points to deeper decline towards the $1670 low – Commerzbank

Treasury yields keep rallying amid Fed’s tapering bets, ahead of NFP

“Gold’s upside potential appears limited as the US Treasury yields continue to climb on the Fed’s tapering, which is almost seen as a done deal ahead of the all-important NFP release due later in the NA session on Friday. The benchmark 10-year yields sit at the highest levels since June, weighing on the non-interest-bearing gold price.”

“The US economy is seen adding 488K jobs in September vs. 235K jobs created in August. Any number below 300K is likely to fade the Fed’s tapering expectations, which could fuel a fresh uptrend in gold price. However, the risks appear to the downside for gold price after the upbeat US ADP jobs data while Fed remains on track to dial back the monetary policy stimulus.”

“On a sustained break below the $1750-$1745 demand area, gold bears could tighten their grip, exposing the multi-week troughs near $1720.”

“Daily closing above the 21-Daily Moving Average (DMA) at $1763 is critical to reverse the near-term bearish momentum in XAU/USD. Further up, gold buyers will target the downward-sloping 50-DMA at $1780, above which a test of the $1800 round number will be inevitable. At that level, the crucial 200-DMA aligns.”