Gold Price Forecast: XAUUSD seems vulnerable near YTD low, remains below $1,750 ahead of NFP

• Gold Price continued with its struggle to register any meaningful recovery from the YTD low.
• Aggressive Fed rate hike bets kept the USD elevated near a 20-year high and capped gains.
• Recession fears acted as a tailwind for the XAUUSD as the focus remains on the NFP report.

Gold Price extended its consolidative price move on Friday and remained confined in a range below the $1,750 level through the early European session.

Investors seem convinced that the Federal Reserve would retain a faster policy tightening path to combat stubbornly high inflation. The bets were reaffirmed by the unsurprisingly hawkish minutes of the June 14-15 FOMC meeting. In fact, policymakers emphasized the need to fight inflation even if it results in an economic slowdown and indicated that another 50 or 75 bps rate hike is likely at the July meeting. This, in turn, was seen as a key factor that continued acting as a headwind for the non-yielding gold.

The prospects for more aggressive Fed rate hikes kept the US dollar elevated near a two-decade high and further undermined the dollar-denominated commodity. The downside, however, remains cushioned amid growing recession fears, which kept a lid on the overnight optimistic move in the US equity markets and offered some support to the safe-haven XAUUSD. Traders also seemed reluctant to place aggressive bets and preferred to wait on the sidelines ahead of Friday's release of the closely-watched US jobs data.

The popularly known NFP report is expected to show that the US economy added 268K jobs in June, down from 390K in the previous month. The unemployment rate, however, is expected to hold steady at 3.6% during the reported month. The data would influence the near-term USD price dynamics, which, along with the broader risk sentiment, should provide some impetus to the gold price. The lack of any meaningful buying interest, however, suggests that the near-term bearish trend might still be far from being over.

Hence, any attempted recovery could be seen as an opportunity for bearish traders and runs the risk of fizzling out rather quickly. Nevertheless, the XAUUSD remains on track to end in the red for the fourth successive week, just above its lowest level since September 2021, around the $1,732 region touched on Wednesday.

Technical levels to watch