Gold Price Forecast: XAU/USD consolidates above the 1,940 mark amid the US holiday

• Gold price remains flat around $1,940 following the volatility session.
• The US Unemployment Rate rose to 3.8%; Nonfarm payrolls were 187k, better than expected.
• The US Manufacturing PMI came in at 47.6 versus 46.4 prior and higher than anticipated at 47.0.

Gold price (XAU/USD) is currently in consolidation mode around $1,940 during the early Asian session on Monday. The US market is closed for the Labor Day holiday and gold price is expected to remain under pressure amid the thin trading volume. Later this week, the US ISM Services PMI for August will be released and the data will likely ramp up volatility.

On Friday, gold price surged above the key resistance level of $1,950 and then reversed its direction to $1,934 after the release of US ISM Manufacturing PMI data for August. The US Bureau of Labor Statistics revealed that Nonfarm Payrolls (NFP) for August came in at 187,000, better than expected at 170,000 and July's reading of 157,000.

The Unemployment Rate improved sharply to 3.8% versus the market consensus and the previous reading of 3.5%. The Average Hourly Earning rose by 0.2% MoM, worse than expectations of 0.3%. Additionally, the Institute for Supply Management (ISM) showed on Friday that the US Manufacturing PMI came in at 47.6 versus 46.4 prior and higher than anticipated at 47.0.

Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against a basket of currencies used by US trade partners, gains traction above 104.25 after bouncing off the low of 103.27. The US bond yields have a volatile session following the US economic data. The 2-year yield currently trades around 4.87% after falling to a three-week low of 4.76% while the 10-year bonds trades near 4.18%. According to the CME FedWatch tool, markets have priced in that the Federal Reverse will not hike rates in its September meeting and the odds of raising rates in November and December have declined to around 35%.

Looking ahead, gold traders will keep an eye on the US ISM Services PMI for August and the US ADP Employment Change due later on Wednesday for fresh impetus. These figures could give a clear direction to gold price.