Gold Price Forecast: XAUUSD finds cushion around $1,866 as DXY struggles, US NFP in focus
- Gold price has sensed support at around $1,866.00 as responsive buyers kick in.
- The DXY seems lackluster ahead of the release of the US NFP.
- A tight labor market in the US may trigger inflationary pressures going forward.
Gold Price (XAU/USD) has regained some strength as responsive buying kicks in after the precious metal tumbled to near $1,866.15 in the Asian session. The precious metal is likely to trade lackluster in the European shift as investors are on the sidelines ahead of the release of the US Nonfarm Payrolls (NFP). The US Bureau of Labor Statistics is likely to report an addition of 391k job opportunities in the labor force, lower than the previous record of 431k. While the Unemployment Rate is likely to improve to 3.5% from 3.6%.
Consistent tight labor market conditions are signaling an extremely high hawkish tone by the Federal Reserve (Fed) in June. The market participants are yet not over with the uncertainty of May’s monetary policy meeting and think tanks in the global markets have started forecasting June’s policy announcement.
Meanwhile, the US dollar index (DXY) has defined its trading range as 103.46-103.94 till the release of the US NFP. The 10-year US Treasury yields have tumbled to near 3.06% but their stability above 3% is very much crucial for the greenback bulls.
Gold technical analysis
On an hourly scale, XAU/USD has attracted some significant bids after hitting the demand zone, which is placed in a range of $1,861.64-1,871.83. The 200-period Exponential Moving Average at $1,890.63 has turned flat, which signals a consolidation ahead, while the 20-EMA at $1,879.50 is still trending lower.
It is worth noting that the Relative Strength Index (RSI) (14) is defending itself from slipping into the bearish range of 20.00-40.00, which signals the availability of responsive buyers.
Gold hourly chart
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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.
