Gold Price Forecast: XAU/USD Slips Below $1,736 – Quick Trade Idea

• Bureau of Labor Statistics released the Nonfarm business sector labor productivity that grew 2.3% in Q2 2021.
• The US dollar index reached 92.99, amid hawkish Fed remarks and stronger than expected NFP figures.
• Forex trading market participants may sell below $1,736 to target the $1,711 and $1,704 levels. 

 

On Tuesday, the yellow metal gold continues trading bearish at the $1,723 level. It continues trading with a bearish bias falling for the 6th consecutive session. Gold price forecast remains bearish on the back of expectations that the Federal Reserve might take monetary action. Thus, the dollar continued to trade higher over hawkish sentiments.

If you are interested in trading XAU/USD with forex robots, check out our guide.

 Stronger Dollar Dragging Gold Lower to $1,713 

The US dollar index tested 92.99 on the back of hawkish Fed remarks. Furthermore, the better than anticipated NFP data released last week also placed a bearish impact on gold. During the past trading hours, the US Treasury Yields on benchmark 10-year note soared to their highest since July 16 at 1.319%. It gave additional strength to the greenback. 

The blend of higher yields and soaring DXY, and the better-than-expected jobs figure pushed the US dollar towards 93 levels. That negatively impacted XAU/USD and keep the bulls on the backfoot.

On the other hand, Tom Barkin remarked about two goals set for the threshold of starting tapering of asset purchases and increasing the interest rates. The hawkish sentiment such as Fed might start reducing monetary support of $120 billion worth of monthly asset purchases sooner than expected is keeping gold bearish. A rollback in the stimulus along with the eventual rate hike could weigh heavily on gold prices in the short term.

Optimistic Prelim Nonfarm Productivity Pressures on Gold 

The Bureau of Labor Statistics reported that the Nonfarm business sector’s labor productivity grew 2.3% in the second quarter of 2021. The output soared 7.9% and hours worked increased 5.5%. From the Q2 of 2020 to the Q2 of 2021, nonfarm business sector labor productivity surged 1.9%. 

The positive economic release from the US placed another bearish pressure on the precious metal gold, driving its price down to the $1,725 level.

Gold Price Forecast – Technical Levels

Support Resistance

1711.45 1754.25

1689.80 1775.40

1668.65 1797.05

Pivot Point: 1732.60

 Gold Price Forecast – Daily Technical Analysis: 50% Fibonacci Pushing XAU/USD Lower

Gold price forecast remains bearish below the $1,734 resistance level. The metal has completed 38.2% and 50% Fibonacci retracement levels on the daily chart at $1,736 and $1,754. XAU/USD fell sharply after testing the resistance level of $1,754, and now it’s heading towards a 23.6% Fibonacci retracement level of $1,711.

The bearish breakout of the support level of $1,711 can extend the selling trend until the next support level of $1,689 and $1,668. Currently, gold’s immediate resistance holds around 1,736 level that’s extended by a 38.2% Fibonacci level. 

On the daily chart, the 50 days EMA (exponential moving average – red line) is holding at a $1,753 level, demonstrating a strong selling trend in gold. Lastly, the leading indicator Stoahstic RSI has come out of the oversold zone, and it’s holding at 64, above the crossover level of 50. It’s suggesting a bullish trend in gold.

Since EMA and RSI indicators are confusing, it’s best to wait for the RSI indicator to cross below 50 before placing a sell trade. The Forex trading market participants may sell below $1,736 to target the $1,711 and $1,704 levels. All the best! 

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