- The gold price forecast remains bullish above the long-held support level of 1,809 level.
- The ADP Non-Farm Employment Change dropped in August to 374K against the forecasted 640K.
- Forex trading market participants may sell below the $1,807 level to target the $1,793 and 1,781 levels.
Gold prices closed at $1815.55 after reaching a high of $1822.60 and a low of $1810.65. The XAU/USD remained flat throughout the trading session as investors remained cautious about making solid bets. It looks like traders are preparing themselves for the key US jobs data that could influence the tapering strategy of the Federal Reserve. The gold price forecast remains bullish above the long-held support level of 1,809 level.
If you are interested in trading XAU/USD with forex robots, check out our guide.
The Weaker Dollar Continues to Underpin Gold Prices
The US Dollar Index, which measures the greenback’s value against a basket of six major currencies, continued its bearish momentum. It dropped for the 4th consecutive session on Wednesday. Furthermore, the DXY fell to 92.3 level, its one-month lowest level, but managed to recover some of its losses and closed its day at 92.5 level.
The bearish momentum of DXY should have made gold prices move higher, but the precious metal also remained under pressure throughout the session and remained flat. Moreover, the US Treasury Yields on a 10-year note also fell on Wednesday. It settled down at 1.29% as the significant jobs data from the US fell short of expectations.
Automatic Data Processing, Inc. Employment Report in Play
The ADP National Employment Report showed that US private employers hired far fewer workers than anticipated in August. However, an uptick in manufacturing activity in the United States helped the greenback gather strength.
The fluctuations in the greenback influence gold prices as it makes bullion cheaper or more expensive for those holding other currencies. The mixed macroeconomic data from the United States left gold with no choice but to remain flat throughout Wednesday’s trading session. On the data front, at 17:15 GMT, the ADP Non-Farm Employment Change dropped in August to 374K against the forecasted 640K.
Quick Economic Event Review
At 18:45 GMT, the final Manufacturing PMI for August remained flat with expectations of 61.1. At 19:00 GMT, the ISM Manufacturing PMI in August surged to 59.9 against the predicted 58.5 and supported the US dollar that weighed on the yellow metal. Construction spending remained unchanged from the expected 0.3%.
The ISM Manufacturing prices dropped to 79.4 against an estimated 84.1 and weighed on the US dollar. The precious metal also remained flat throughout the day after the boost it got from the Fed last week after Chair Jerome Powell’s speech. He said that although tapering could begin this year, the central bank would cautiously raise interest rates. He started to fade off from the expectations of a substantial number of NFP jobs data scheduled to be released on Friday.
The mixed two-important data about ADP job creation and the ISM Manufacturing PMI also confused investors about making any strong bids in precious metals, which left gold with flat momentum.
Gold Price Forecast – Technical Levels
Support Resistance
1809.94 1821.89
1804.32 1828.22
1797.99 1833.84
Pivot Point: 1816.27
Gold Price Forecast – Upward Trendline Support Buying
The gold price forecast remains bullish above the long-held support level of 1,809 level. On the 4-hourly timeframe, an upward trendline is extending support at the 1,809 level. However, the closing of candles above this level confirms its validity.
On the bullish side, the resistance stays at the 1,821 level, and a bullish breakout of this level could extend the buying trend to 1,832. Alternatively, the selling trend dominates below the 1,808 support level.
On the bearish side, the support stays at the triple bottom level of 1,808. A bearish breakout of this level exposes gold prices towards the next support levels of 1,793 and 1,781 levels.
The 50 day EMA (exponential moving average – red line) holds at the $1,816 level, supporting gold’s bearish trend. Moreover, the leading indicator, Stochastic RSI, stays below 50, keeping the bearish trend ahead of US unemployment claims. Therefore, the Forex trading market participants may sell below the $1,807 level to target the $1,793 and 1,781 levels. Alternatively, buying trades can be seen above the $1,807 level today. All the best!
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