Gold Price Forecast: XAU/USD aims an establishment above $1,710 ahead of US ISM Services PMI

• Gold price is aiming to shift its auction profile above $1,710.00 despite upbeat US NFP data.
• The US ISM Services PMI is expected to remain a major event for the week.
• US markets will remain closed on account of Labor Day.

Gold price (XAU/USD) is auctioning in a minor corrective phase after printing a short-term high of $1,718.00 on Friday. The precious metal extended its gains on Friday after overstepping the psychological resistance of $1,700.00 with much confidence. Investors went gung-ho over the yellow metal despite higher-than-expected US Nonfarm Payrolls (NFP) data.

The US economy created 315k jobs in August vs. the expectation of 300k and the prior release of 526k. No doubt, the economic data remained upbeat against expectations but what kept gold prices going is the decline in the increasing rate of job creation.

 Scrutiny of US NFP indicates that the investors should scale down their expectations for the extent of employment generation. As the US economy is operating at full employment levels for a tad longer period, the employment creation rate curve is displaying exhaustion signals.

Meanwhile, the US dollar index (DXY) has ignored the escalation in the Unemployment Rate and is aiming to capture the psychological resistance of 110.00 sooner. The jobless rate has scaled sharply at 3.7% vs. forecasts and the prior print of 3.5%. Now, the focus has entirely shifted to the US ISM Services PMI data, which is expected to decline to 54.9 against the prior release of 56.7. Investors should be informed that the US markets are closed on account of Labor Day.

Gold technical analysis

Gold prices have attempted to overstep the 23.6% Fibonacci retracement (placed from August 10 high at $1,807.93 to September 1 low at $1,688.92) at $1,717.24. The 20-and 50-period Exponential Moving Averages (EMAs) have given a bullish crossover at $1,708.15, which adds to the upside filters.

Also, the Relative Strength Index (RSI) (14) has attempted to shift into the bullish range of 60.00-80.00, which indicates a bullish reversal.

Gold hourly chart