Gold Price Forecast: XAU/USD extends the rally above $2,160, investors await US NFP data

• Gold price gains momentum around $2,165 amid the softer US Dollar, adding 0.12% on the day. 
• The dovish comments from central bank policymakers and safe-haven flows boost the demand for gold. 
• Gold traders await the Eurozone GDP Q4 growth numbers and US February labor market data. 

Gold price (XAU/USD) extends its upside around $2,165 after reaching a record high during the early European session on Friday. A weaker US Dollar (USD) and a decline in US Treasury bond yields provide some support to the gold price. Furthermore, the rising expectation for the first rate cut by the Federal Reserve (Fed) in the June meeting boosts the demand for gold price. 

That being said, the dovish commentary from central bank policymakers creates a tailwind for the yellow metal. The Fed Chair Jerome Powell said the US central bank is "not far" from gaining enough confidence that inflation will reach its 2% target to begin lowering interest rates. Investors will take more cues from the US Nonfarm Payrolls (NFP) data on Friday for fresh impetus, which is expected to see 200,000 jobs added to the US economy. However, the stronger-than-expected data might lift the Greenback and exert some selling pressure on the gold price. 

Meanwhile, European Central Bank (ECB) Christine Lagarde indicated the ECB may ease policy in its June meeting. The ECB maintained its benchmark rate unchanged at 4.0% at its March meeting on Thursday, but it lowered its inflation forecast for 2024 from 2.7% to 2.3%, indicating the central bank opened the door to possible rate cuts in the coming months.

Furthermore, Chinese investors purchased the yellow metal as a safe place to keep their cash after the property sector and stock markets in China tumbled. The escalating geopolitical tensions in the Middle East might be attributed to the demand for traditional safe-haven assets as well.  

Gold traders will closely watch the Eurozone Gross Domestic Product (GDP) for the fourth quarter (GDP). On the US docket, the February labor market data, including Nonfarm-Payrolls, Unemployment Rate, and Average Hourly Earnings will be released. Traders will take cues from the data and find trading opportunities around the gold price.