Gold Price Forecast: XAU/USD reclaims the 200-DMA though is struggling around $1809

• The non-yielding metal is trading above $1805, the trendsetter 200-DMA.
• The US ADP data was worse than expected; it could be a prelude to the Nonfarm Payrolls (NFP).
• XAU/USD Technical Outlook: A daily close above the 200-DMA could signal a shift in gold’s trend.

Gold (XAU/USD) climbs in the North American session as US T-bond yields led by the 10-year benchmark note fall three basis points, undermining the greenback. At the time of writing, XAU/USD is trading at $1808, up 0.44%.

The market sentiment is mixed, as European bourses remain in the green, while US equity indices fluctuate between gains/losses. Meanwhile, the US Dollar Index extends its losses throughout the week to three straight days, down 0.20%, sitting at 96.07.

ADP worse than foreseen report a prelude of Friday’s Nonfarm payrolls?

Before Wall Street opened, the ADP Jobs report for January was released. The print came awful, showing that the US economy lost more than 301K, private employees when analysts estimated it would add 207K new jobs. 

The ADP Chief Economist said that “The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact on job growth.” Nevertheless, officials in the White House and Fed members warned that the January employment report would be disappointing, subject to the impact of the Omicron variant.

On Tuesday, Fed speakers with the likes of Philadelphia Fed President Patrick Harker and St. Louis James Bullard crossed the wires. 

Philadelphia’s Fed Harker said that the Fed could begin unwinding its balance sheet once Federal Funds Rates (FFR) hit 1 – 1,25%. Worth noting that Harker said that the employment report would probably be bad due to the Omicron variant. Regarding hiking rates, he does not foresee a 50 bps hike.

Meanwhile, St. Louis Fed Bullard said that he estimates two hikes, one in March followed by May. Bullard said that at the beginning of the H2, the US central bank would be able to assess how robust inflation seems for the rest of 2022 and expects to adjust accordingly. Concerning Quantitative Tightening (QT), Bullard noted that he would like to start in Q2 and emphasized that the runoff could be faster.

XAU/USD Price Forecast: Technical outlook

On Wednesday, the yellow metal, so far, reclaimed the 200-day moving average (DMA), which lies at $1,805. However, it faces resistance at the mid-line between the central/bottom trendlines of Pitchfork’s channel, around $1,808-12 area.

The break above ALL the DMAs appears to put the greenback under pressure. Nevertheless, to further cement gold’s trend shift to the upside, XAU bulls would need a daily close above $1,815. In that event, the first resistance would be the central trendline of Pitchfork’s channel around $1824-26. A breach of the latter would expose July 15, 2021, high at $1,834, followed by the mid-line within the central/top trendline of the channel around $1,844.