Gold Price Forecast: XAU/USD turns sideways after a wild gyration above $2,020 as investors eye key US NFP

• Gold price has turned sideways above $2,020.00 ahead of the US NFP data.
• US Services PMI defending dropping below 50.0 but recession fears get deepened.
• The Labor Cost Index data is expected to soften ahead, which might decelerate inflationary pressures further.

Gold price (XAU/USD) is showing a lackluster performance above $2,020.00 in the early Tokyo session. The precious metal witnessed a wild gyration after the release of weak United States Employment data on Wednesday. The Gold price has turned sideways as investors have shifted their focus toward the release of the US Nonfarm Payrolls (NFP) data.

S&P500 continued its downside move on Wednesday as weaker Services PMI stroked signs of recession in the US economy, indicating negative market sentiment. The US Dollar Index (DXY) rebounded firmly from its fresh monthly low of 101.40 but observed a restricted upside near 102.00. The USD Index attracted significant bids despite the release of downbeat US Services PMI and labor market data.

March’s US ISM Services PMI dropped to 51.2 vs. the consensus of 54.5 and the former release of 55.1. A slowdown in the Service sector shows deepening concerns due to higher rates by the Federal Reserve (Fed). Also, households are struggling in bearing the burden of high inflation. The New Orders Index that conveys forward-demand dropped dramatically to 52.2 from the estimates of 57.6 and the prior release of 62.6. It is quite satisfactory that the US Services PMI gamut didn’t fall below 50.0 as it would have been considered a contraction.

After the release of downbeat US Automatic Data Processing (ADP) Employment data, investors are keenly awaiting the release of US NFP, which will provide more clarity on labor market conditions. The Unemployment Rate is expected to remain steady at 3.6%. And Average Hourly Earnings would soften to 4.3% vs. the former release of 4.6%.

Gold technical analysis

Gold price is oscillating in a narrow range of $2,011-2,033 on an hourly sale. The precious metal found cushion after a wild move from March 20 high at $2,009.88. The Gold price is struggling to sustain above the 20-period Exponential Moving Average (EMA) at $2,021.20. While the 50-period EMA at $2,010.00 is still advancing.

Meanwhile, the Relative Strength Index (RSI) (14) has dropped into the 40.00-60.00 range after exhaustion in the upside momentum.

Gold hourly chart