Gold Price Forecast: XAU/USD eyes recovery above $2,020 as US NFP fails to support hawkish Fed bets

• Gold price is aiming to extend its recovery above $2,020.00 as US NFP report seems less supportive of hawkish Fed bets.
• A scrutiny of the US labor market report showed that March’s labor additions were downwardly revised.
• Gold price has shown a recovery move after correcting to near the prior accumulation area placed in a range of $1,971-2,009.

Gold price (XAU/USD) is looking to extend its recovery above the immediate resistance of $2,020.00 in the early Tokyo session. The precious metal was heavily dumped on Friday after the release of the solid US Employment data. However, a scrutiny of the US labor market report showed that March’s labor additions were downwardly revised, which changed the entire context.

The addition of fresh talent in March’s Nonfarm Payrolls (NFP) report was revised down from 263K against the previously reported for March to just 165K. A 37% downward revision in March’s Employment report meant that the net jump in fresh payrolls in April was a mere 2%, making it insufficient for the Federal Reserve (Fed) to reconsider its neutral interest rate guidance.

However, the catalyst that will keep haunting Fed policymakers is the upbeat Average Earnings report. Earnings accelerated in April at a pace of 0.5% while the street was anticipating a pace of 0.3%.

Optimism influenced by the unimpressive US NFP report resulted in a rally in S&P500. Investors believed that the worse is over for now as the Fed has reached its terminal rate. Meanwhile, US President Joe Biden is to meet with Speaker Kevin McCarthy and other congressional leaders on Tuesday to talk about the looming debt ceiling crisis, as reported by ABC News. US Biden has already warned Republicans that a delay in settling the US debt crisis could cost significant labor loss and Gross Domestic Product (GDP).

Gold technical analysis

Gold price has shown a recovery move after correcting to near the prior accumulation area placed in a range of $1,971-2,009 on a two-hour scale. The precious metal found support near the 200-period Exponential Moving Average (EMA) at $2,003.72. Also, the Relative Strength Index (RSI) (14) has defended its cushion around 40.00 in the meantime.

Gold two-hour chart