Gold Price Forecast: XAUUSD advances sharply, hovering around $1750 after solid US data

Gold spot (XAUUSD) climbs during the North American session, bouncing from fresh YTD lows at around highs $1720s, eyeing a break above the $1750 figure as the US dollar weakens across the board. At the time of writing, XAUUSD is trading at $1744.27.

The yellow metal rebounds from weekly lows on a soft US dollar

Sentiment remains fragile, fluctuating on an upbeat US jobs report. The US Department of Labour reported that Nonfarm Payrolls for June rose by 372K, beating estimates of 268K, while the previous reading was downward revised to 384K. That clears the way for the Federal Reserve to remain tightening aggressively. At the time of writing, money market futures STIRs odds of a 75 bps hike to the Federal funds rate (FFR) lie at 97%, while investors expect a 50 bps rate raise for the September meeting.

Reflection of the aforementioned is US stocks mixed. In the meantime, the greenback erases earlier gains after reaching a fresh YTD high, tumbling below the 107.000 mark, down 0.07%, while the US 10-year Treasury rate is rising six bps, yielding 3.063%.

Lingering recession fears remain fueled by the inversion of the US 2s-10s yield curve, which sits at -0.021%, up from -0.03% at around 14:15 GMT.

Fed speakers will continue crossing news wires, led by New York Fed President John Williams. However, Atlanta’s Fed President Raphael Bostic said that the US jobs report shows the economy is strong, and he backs a 75 bps rate hike. On Thursday, Fed’s FOMC 2022 voters, Christopher Waller and James Bullard expressed that they favor a 75 bps rate hike in July, and downplayed recession fears, stating that the US economy remains solid.

What to watch

In the next week, the US economic docket will feature additional Fed speakers before entering the blackout period of the July monetary policy meeting. The Regional Fed Presidents Williams, Barkin, and Bostic will speak on  Monday, Tuesday, and Friday, respectively. Meanwhile, Christopher Waller will take the stand on Thursday.

Data-wise, the June’s Consumer Price Index (CPI), the Producer Price Index (PPI), and the University of Michigan (UoM) Consumer Sentiment will shed some light on the status of the US economy.

Gold Price Forecast (XAUUSD): Technical outlook

Gold’s daily chart depicts a falling wedge forming, suggesting that the yellow metal could turn bullish in the near term. Nevertheless, oscillators are in oversold conditions, with the RSI at 28.70, far from supporting a bullish bias, but once it exits from that area, gold might consolidate before challenging the rising wedge top trendline around the $1800 mark.