Gold Price Forecast: XAU/USD struggles around $1,700 ahead of US NFP

• Gold price is facing barricades around $1,700.00 as investors await US NFP.
• The DXY may face the wrath amid lower consensus for the US NFP.
• The odds of a consecutive 75 bps rate hike by the Fed will remain intact.

Gold price (XAU/USD) is advancing gradually higher as the US dollar index (DXY) is displaying a subdued performance ahead of the US Nonfarm Payroll (NFP) data. The precious metal is struggling to cross the psychological resistance of $1,700.00 as investors are awaiting the release of the US employment data for fresh impetus.

On Thursday, gold prices witnessed a steep fall after the release of the higher-than-expected US ISM Manufacturing PMI data. The economic data was released at 52.8, in line with the prior release but higher than the forecasts of 52.0. Investors were expecting a fall in the volume of manufacturing activities as the corporate sector has postponed expansion plans led by the unavailability of cheaper money for disposal. However, a surprise upside in the Manufacturing PMI drove the DXY close to the critical resistance of 110.00.

Ahead of the US NFP, the DXY could face selling pressure as a consensus for employment generation is lower than the prior release. The US NFP is expected to land at 300k, lower than the prior release of 528k. A downbeat release may halt the DXY’s dream rally and will strengthen the gold prices. However, the odds of a consecutive 75 basis points (bps) rate hike by the Federal Reserve (Fed) will remain stable.

Gold technical analysis

Gold prices are declining firmly towards the monthly lows placed at $1,680.91, recorded on July 21. The 20-period Exponential Moving Average (EMA) at $1,711.61 is declining, which adds to the downside filters.

Also, the Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.00, which indicates a continuation of downside momentum.

Gold four-hour chart