Gold Price Forecast: XAU/USD reaches new all-time high but trims earlier gains

• XAU/USD hits new ATH high as Fed signals pause, though profit-taking weighed on Gold price.
• The labor market eases as US Initial Jobless Claims rise to 242K, but Continuing Claims fall to 1.81 M.
• XAU/USD Price Analysis: It could dip below $2050 with sellers eyeing $2000; otherwise, buyers could challenge the ATH.

Gold price remains trading in positive territory after hitting a new all-time high (ATH) at around $2081.82. Some profit-taking, risk aversion, and another central bank increasing rates dragged XAU/USD price towards the $2050 area. At the time of writing, XAU/USD exchanges hands at $205.92, holding to gains of 0.40%.

XAU/USD clings to its earlier gains, though at brisk of losing $2050

The financial turmoil around the US banking system continues, as PacWest and Western Alliance Bank are under solid selling pressure, which triggered flows towards safety. Therefore, XAU/USD continues to hold its ground, despite recent US Dollar (USD) strength.

The economic agenda in the United States (US) revealed that unemployment claims for the week ending on April 29 jumped to 242K, exceeding estimates of 240K, a report cheered by  US Federal Reserve (Fed) officials. Continuing claims, which include citizens receiving unemployment benefits for a week or more, fell by 38K, to 1.81 million, in the week ending on April 22.

The XAU/USD reached its new ATH high after the Fed increased rates above the 5% threshold and signaled that it would be data-dependent, opening the door for a pause. However, Fed Chair Jerome Powell reiterated that inflation remains high and that the labor market is tight. He kept the chances for additional tightening on the table and pushed back against cutting rates amidst inflation levels, twice the Fed’s goal.

On Thursday, the US Dollar Index (DXY), which measures the value of six currencies against the buck, fluctuates between gains and losses at 101.340, influenced by US Treasury bond yields. The US 10-year Treasury bond yield is losing eight bps, down to 3.315%, a tailwind for XAU/USD’s price.

What to watch?

On Friday, the US economic docket will feature the US Nonfarm Payrolls report for April, expected at 180K, less than the prior’s month 236K jobs added to the economy. Additionally, Average Hourly Earnings are expected to remain unchanged at 0.3% MoM, while the Unemployment Rate is foreseen at 3.6%.

XAU/USD Technical Analysis

From a daily chart perspective, the XAU/USD is still upward biased, though Thursday’s price action opens the door for a mean reversion move. If XAU/USD’s Thursday daily candle closes beneath $2050, that will exacerbate a correction. Initially, XAU/USD could fall towards $2030.50, May 4 low, followed by the March 20 swing high, which turned support at $2009.75. A breach of the latter will expose the $2000 figure.

Conversely, a bullish continuation could happen if XAU/USD buyers hold prices above $2050 as they eye the $2100 barrier.