Gold Price Forecast: XAU/USD finds offers around $1,850 on firmer DXY, focus shifts to US NFP

• Gold price is facing resistance around $1,850.00 on upbeat US ISM Manufacturing PMI data.
• A parallel upside move in the DXY and the golf prices is indicating an improvement in the safe-haven appeal.
• The US NFP will be the major event this week, which is expected to land at 325k.

Gold price (XAU/USD) is displaying some signs of exhaustion after a pullback move to its crucial resistance at $1,850.00. The precious metal and the US dollar index (DXY) have displayed a rare parallel upside move as both assets were advancing north on Wednesday. An initiative selling action could be observed in the gold prices amid lack of positive triggers.

Outperformance from the economic data

On Wednesday, the Institute for Supply Management (ISM) reported the Manufacturing PMI at 56.1, higher than the forecasts of 54.5 and the prior print of 55.4. An outperformance from the US economy on Manufacturing PMI despite rising inflationary pressures spurted a rally in the DXY. The DXY moved sharply higher after an upside break of the consolidation formed in a range of 101.80-102.05. Currently, the asset is balancing around 102.60.

US NFP in focus

This week, the entire investing community will focus on the release of the US Nonfarm Payrolls (NFP), which is due on Friday. A preliminary estimate for the additional jobs created in April is 325k, against the prior print of 428k. Also, the average monthly NFP figure is 551.6k from the last 12-months. More than 100k fall in job openings from a month and 200k fall in relation to the 12-month average figure indicates that the Federal Reserve (Fed) is required to focus again on balancing the labor market.

Gold technical analysis

On an hourly scale, the gold price is facing barricades around the ascending trendline of the Symmetrical Triangle, which is placed from May 20 low at $1,832.41 while the descending trendline is plotted from May 24 high at $1,869.75. The Relative Strength Index (RSI) (14) has displayed a sheer upside move from the bearish range of 20.00-40.00 to the bullish range of 60.00-80.00, which indicates a firmer reversal in the counter.

Gold hourly chart