Gold Stalls as NFP Report Approaches

Gold Stalls as NFP Report Approaches

Gold (XAU/USD) traded into the early European session on Thursday and was last spotted trading around the $2,050 region, a few points below the $2,055 all-time set yesterday.

Investors continue in their worry over the pandemic-induced economic crisis and the dwindling prospects of a sharp recovery. This has largely favored the yellow metal in securing its footing above the $2,000 mark.

Market concerns were stoked further by yesterday’s worse-than-expected ADP report, which indicates that the labor market might not be recovering anytime soon. This coupled with the political stalemate over the next round of fiscal stimulus packages has put intense pressure on the US dollar, which in turn provided additional support for the dollar-denomination commodity.

Furthermore, the prevailing decline in the US Treasury bond yields drove extra demand for the non-yielding commodity. The 10-year US government bond recorded a fresh record low on Tuesday.

Nonetheless, strong risk-on sentiment in the equity markets and the overbought conditions surrounding gold has caused the asset to stall, which has prompted some profit-taking.

Moving on, market participants will be looking at the US economic docket today—which features the US Initial Weekly Jobless Claims—for clues. This report could present some short-term trading opportunities as the markets gear-up for the NFP release, scheduled for tomorrow.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — August 6

XAU/USD Major Bias: Bullish

Supply Levels: $2,055, $2,060, and $2,080

Demand Levels: $2,010, $2,000, and $1,980

Gold is being relentless in its stride for gains as it has now reached the previous target ($2,050) causing buyers to shift their focus to $2,100.

However, as mentioned above, we could experience some profit-taking in the near-term, which could prompt gold to witness a modest retrace. That said, the path downwards is well fortified with several support levels (50HMA, trendline, and $2,000 psychological support).

Note: Learn2.trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results

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