Gold Price Forecast: XAUUSD turns south towards $1,700 ahead of US NFP

• Gold Price gives up recovery gains, as the US dollar rebounds firmly.
• Risk-aversion backs the USD ahead of the critical US NFP.
• XAUUSD extends its journey towards the $1,700 mark.

Gold Price is trading with mild losses, attacking nine-month lows of $1,732, as the US dollar finds renewed demand amid a risk-off market profile.

Investors digest the news of the former Japanese Prime Minister Shinzo Abe passing away due to a rare incident that happened in Japan. He was shot twice from behind by a shotgun in the chest and was rushed to the hospital. But succumbed to the wounds a few hours later.

Further, looming recession concerns, aggressive Fed rate hike expectations and the sell-off in the EUR/USD pair towards parity are all boding well for the greenback at gold’s expense. Amidst risk-off flows dominated, the US Treasury yields are losing their appeal, as government bonds remained favored.

Markets are eagerly awaiting the release of the all-important US Nonfarm Payrolls data, with the headline number seen arriving at 300K in June vs. 268K reported in May. The US unemployment rate is likely to hold steady at 3.6% in the previous month.

The dollar is likely to remain in a win-win situation whatever the outcome of the US labor market data may be. That said, the Fed will continue with its hawkish tightening stance, as it remains committed to tackling the inflation monster.  The bright metal remains exposed to downside risks in the near term.

Gold Price: Daily chart

Gold price slipped further after facing rejection below $1,751, which is the 23.6% Fibonacci Retracement (Fibo) level of this week’s sell-off from $1,815 levels.

Daily closing above the latter is required to initiate any meaningful recovery from multi-month troughs of $1,732. Further up, the 38.2% Fibo level at $1,763 will challenge the bearish commitments.

Powerful resistance at $1.770 will be the next stop for XAU bulls. That level is the confluence of the psychological mark and the 50% Fibo level of the same decline.

Also read: Gold Price Forecast: XAUUSD remains non-committal below $1,750, awaiting US NFP

The 14-day Relative Strength Index (RSI) is flattening while within the oversold territory.

On the downside, the $1,732 will be the initial support, below which the rising channel target at $1,722 will come into play. A sustained move below the latter will expose the $1,700 threshold.

Gold Price: Additional levels to consider