- Gold prices hover around $3,550 as investors wait for significant US NFP data for August.
- The US dollar is trading lower ahead of critical labor market indicators.
- Economists are anticipating the addition of 750,000 jobs in the US for August.
During the European trading session on Friday, gold prices (XAU/USD) are expected to fluctuate around $3,350. This comes as investors anticipate the release of the US Non-Farm Payroll (NFP) data for August at 12:30 GMT.
The official labor market statistics from the US will be pivotal, as they are likely to influence market expectations regarding interest rates. After the July NFP report revealed significant revisions to employment data from May and June, the Fed’s forecasts intensified in early August.
Lower interest rates from the Fed generally boost the appeal of non-yielding assets like gold.
There’s an expectation that US businesses will add 75,000 new jobs, with the unemployment rate projected to rise to 4.3% from the previous figure of 4.2%.
In addition, average hourly wages, a key gauge of wage growth, have grown moderately by 3.7%, down from 3.9% in July, with monthly increases of 0.3%.
As we await the NFP data, the US Dollar Index (DXY), which reflects the value of the dollar against six major currencies, is trading about 0.25% lower, hovering around 98.00. Generally, a weaker dollar makes gold a more appealing investment.
Gold Technical Analysis
The upward momentum in gold prices has paused after reaching a high of nearly $3,580 on Wednesday. The yellow metal gained strength following a break from a symmetrical triangle pattern on the daily chart.
The short-term trend for gold appears bullish, with the 20-day exponential moving average (EMA) positioned around $3,436.70.
Additionally, the 14-day relative strength index (RSI) is nearing 75.00. A corrective movement in gold prices is likely as momentum indicators suggest buying pressure.
Looking below, the key support level for a significant stretch is the 20-day average. The $3,600 mark is also considered a crucial barrier for this asset.
