XAU/USD Gold Price Forecast: Market Focus Towards NFP


Market players are currently waiting for the US jobs data report which will be reported tonight. This report is data that can influence the direction of the country's financial policy.

The US dollar has been trading steady and the country's treasury bonds are trading high.

In the market trading session earlier this week, the Central Bank of Canada and Europe have announced interest rate cuts where at this point the reading of the inflation rate in both countries has still not reached the 2% target. This follows the "trend" of inflation readings that have been reported since the first quarter of this year showing a decrease.

The initial expectation of the NFP report tonight is seen to be an addition of 180,000 jobs in May 2024 while the unemployment rate in the country is expected to remain unchanged.

Based on the preliminary employment data report that was reported earlier this week, we at SARACEN MARKETS believe that the employment data reading tonight is likely to provide a boost to the American Dollar as well as provide new sentiment towards the implementation of interest rate cuts in the country.

Markets currently expect the Fed to likely implement an interest rate cut at the September 2024 FOMC meeting.

Gold Market

Gold prices were seen trading high after the Canadian and European Central Banks implemented interest rate cuts for the first time in 2024.

In addition, preliminary readings of JOLTS and ADP employment data that have been reported have been seen to give early indications of a slowing labor market.

The Middle East conflict this week was seen to escalate as Israel launched a counter-attack against Hezbollah. In addition, the China-Taiwan conflict is becoming more tense when China warns of war against the country if Taiwan intends not to ally with the country.

The demand for gold by the central banks of the "emerging market" countries (BRICS) is increasing when the country's federation intends to establish new trade transactions that do not involve the use of the American dollar.

But at this point, gold market players will be fully focused on the US employment data report that will be reported tonight.

Technical Analysis

Based on the daily chart, the price level of $2,376 and $2,397 will be the main obstacle for gold to continue trading high.

If the NPF data report tonight is able to change the market sentiment towards the implementation of interest rate cuts by the Fed, gold is seen to be able to trade low at least until the price level of $2,327-$2,300.

But if otherwise, the $2,450 level can be challenged again. The price level of $2,265 is seen to be the main focus of gold buyers.