Gold Price Forecast: XAU/USD Stabilizes Before Thursday’s Nonfarm Payroll (NFP) Report

• Gold Prices Await Nonfarm Payrolls Report for US Labor Market Insights.
• Gold Demand May Rise as Trump’s Tax Bill Advances, Potentially Increasing the Budget Deficit.
• XAU/USD Holds Below $3,350, with Momentum Indicators Showing Stability Above Neutral.

Gold (XAU/USD) prices are currently confined within a narrow range as the market processes the recent ADP employment data and anticipates the upcoming Nonfarm Payroll (NFP) report.

With the current price of XAU/USD around $3,340, factors such as the US President Trump’s tax reform and future interest rate expectations continue to influence gold trading dynamics.

The ADP Employment Change report for June revealed a decrease in private sector jobs, contrary to expectations of an increase. This has led to a negative sentiment about the strength of the US labor market.

Analysts had initially projected an increase of 95,000 jobs in May; however, the actual figures showed a decline of 33K, indicating potential weaknesses in the labor market.

This data serves as a precursor to the Nonfarm Payrolls (NFP) report, which is also expected to show a reduction in jobs, possibly affecting future Federal Reserve interest rate decisions.

The upcoming NFP report is expected to show a drop in job additions and a slight increase in the unemployment rate, which could lead to expectations of lower interest rates, thereby supporting gold prices.

Fed Chair Jerome Powell emphasized the importance of data in determining interest rate decisions at the recent ECB Forum on Central Banking, indicating a cautious approach to rate cuts.

This stance suggests that a rate cut in September remains a possibility, depending on upcoming economic data.

Gold Market Daily Digest: XAU/USD Stabilizes as Trump’s Tax Bill Progresses Through Congress

• The Senate has passed the Trump administration’s proposed tax bill, which could significantly impact the deficit.
• The House of Representatives is set to vote on the bill, with expectations to finalize it by July 4.
• Critics from various political backgrounds, including Elon Musk and several Democratic leaders, have expressed concerns that the bill could lead to inflation and a weaker US Dollar, which typically increases gold’s appeal as a hedge.
• The ISM Manufacturing PMI for June exceeded expectations, suggesting some resilience in the manufacturing sector.
• Recent JOLTS data indicated higher-than-expected job vacancies, providing a mixed view of the employment scenario.
• The ECB forum in Sintra continues, with key discussions on inflation and interest rates that could influence global financial markets and gold prices.
• Rate cut prospects remain a central theme in financial discussions, potentially boosting the appeal of non-yielding assets like gold.
• As trade discussions proceed, the US aims for smaller, incremental deals to avoid new tariffs, particularly with key economies like the UK and China.

Gold Technical Analysis: XAU/USD Faces Resistance at 20-day SMA

Gold is trading close to $3,340, with the 20-day Simple Moving Average (SMA) acting as a resistance point near $3,350.

The 23.6% Fibonacci retracement level from the recent high to low provides additional resistance at $3,371. A breakout above this level could lead to a test of the $3,400 mark, potentially reaching the recent high of $3,452.

Gold (XAU/USD) Daily Chart Analysis

The Relative Strength Index (RSI) is currently near 52, indicating that momentum is somewhat neutral.

On the downside, the 50-day SMA provides support around $3,321, followed by the $3,300 level and the 50% Fibonacci retracement at $3,229.

A decline below these levels could expose the May low of $3,120.