Gold Price Forecast: XAU/USD remains confined in a range, awaits US jobs data
- Gold extended its sideways consolidative price move through the early North American session.
- The prevalent risk-on mood was seen as a key factor capping the upside for the safe-haven metal.
- The USD languished near one-month lows amid dovish Fed expectations and extended some support.
- Gold Price Forecast: XAU/USD going nowhere in a hurry ahead of NFP on Friday
Gold dropped to fresh daily lows, below the $1,810 level during the early North American session, albeit lacked follow-through selling and remained confined well within the weekly trading range. Despite concerns about the fast-spreading Delta variant of the coronavirus, the recent strong bullish run in the global equity markets continued acting as a headwind for traditional safe-haven assets. This, in turn, was seen as a key factor that kept a lid on any meaningful upside for gold. That said, a combination of factors extended some support to the precious metal and helped limit the downside, at least for the time being.
Investors now seem convinced that the Fed will wait for a longer period before deciding to roll back its massive pandemic-era stimulus. The speculations were further fueled by Wednesday's disappointing ADP report, which showed that the US private-sector employers hired far fewer workers than expected in August. The data raised doubts about the US labour market recovery and further dampened prospects for an early Fed lift-off, which was evident from a softer tone surrounding the US Treasury bond yields. This kept the US dollar bulls on the defensive near one-month lows and might lend some support to dollar-denominated commodities, including gold.
Moreover, investors might also refrain from placing any aggressive bets, rather prefer to wait on the sidelines ahead of Friday's release of the closely-watched US monthly jobs data. The popularly known NFP report will provide fresh clues about the likely timing of the Fed's tapering plan. This, in turn, will play a key role in determining the next leg of a directional move for the non-yielding gold. In the meantime, the XAU/USD seems more likely to prolong its range-bound price action witnessed over the past three trading sessions.
Technical outlook
Looking at the technical picture, the XAU/USD, so far, has struggled to capitalize on its move beyond the 100-day/200-day SMA confluence region. The warrants some caution for bullish traders and positioning for any extension of the recent strong rebound from multi-month lows, around the $1.686 region touched on August 9.
From current levels, the $1,823 region, multi-week tops touched on Monday, now seems to act as immediate resistance. This is followed by the $1,832-34 supply zone, which if cleared decisively will mark a fresh bullish breakout and trigger a fresh bout of the short-covering move. Gold could then accelerate the momentum towards the $1,852 region en-route the next major hurdle near the $1,869-70 area.
On the flip side, the weekly swing lows, just ahead of the $1,800 mark, might continue to protect the immediate downside. Sustained weakness below might prompt some technical selling and drag the XAU/USD back towards horizontal support near the $1,776-74 region. This could act as a strong base for the commodity, which if broken decisively might shift the near-term bias in favour of bearish traders.
