Gold Price Forecast: XAU/USD oscillates around $1,740 as DXY declines, US NFP eyed

• Gold price is witnessing a muted performance as investors await US NFP.
• The DXY is expected to surrender the critical support of 107.00.
• The US employment data is expected to display a vulnerable performance.

Gold price (XAU/USD) is displaying a lackluster performance in the early Tokyo session. The precious metal is juggling in a minute range of $1,738.79-1,741.16 as the US dollar index (DXY) is trading subdued ahead of the US Nonfarm Payrolls (NFP). On a broader note, the bright metal has turned sideways after a sheer downside move. The absence of recovery signals in the asset is hinting at more downside potential.

Meanwhile, the DXY is likely to surrender the critical support of 107.00 as the asset is displaying exhaustion signals after failing to print a fresh 19-year high. The asset attempted to surpass Wednesday’s high at 107.26, however, a failure on the same is pushing the asset lower.

In today’s session, the release of the US NFP will provide decisive guidance to the gold prices. A preliminary estimate for the US NFP is 270k, lower than the prior print of 390k. While the Unemployment Rate will remain stable at 3.6%. It is worth noting that the economy is maintaining its full employment levels consecutively for the past eight months, which will keep the DXY underpinned.

Gold technical analysis                   

The gold prices are going through the phase of inventory distribution on an hourly scale. Considering the prior downside moves, a follow-up decline is expected in the counter after the downside break of the consolidation formed in a $1,736.55-1,748.77 range. The precious metal has failed to sustain above the 21-period Exponential Moving Average (EMA) at $1,742.50, which signals the strength of the greenback bulls. Also, the 50-EMA at $1,751.80 is declining, which adds to the downside filters. The Relative Strength Index (RSI) (14) is on the verge of surrendering the support of 40.00, which will fetch a fresh downside fall in the asset.

Gold hourly chart