Gold Price Forecast: XAU/USD weakens after NFP

  • US Nonfarm Payrolls increased by 339,000 in May, beating expectations of 190,000.
  • The unemployment rate increased more than expected, from 3.4% to 3.7%.
  • The dollar gained momentum, yields rose and gold hit new daily lows.

Gold prices fell from the $1,980 area to $1,971 after the release of the official US employment report, which showed an increase in Non-Farm Payrolls above expectations.

The US economy added 339,000 jobs in May, beating the market consensus of 190,000, marking the highest reading in four months. In addition, the April figures were revised upwards, from 253,000 to 294,000. The unemployment rate rose from 3.4% to 3.7%, and labor force participation held at 62.6%.

The dollar initially rallied strongly, reaching new highs against the Euro, British Pound and Japanese Yen, and pared losses against the Canadian Dollar, New Zealand Dollar and Australian Dollar. However, the dollar’s momentum began to moderate.

US yields rallied but then fell back as markets weighed whether the jobs numbers were strong enough to pressure the Federal Reserve for another rate hike. Rising Treasury yields weighed on Gold, which fell as low as $1,971. The yellow metal is currently trading at $1,975 in a volatile post-NFP environment.

To the upside, Gold is facing strong resistance around the $1,980/$85 area. A break to the upside could push prices towards $2,000. Conversely, a drop below $1,970 would weaken the outlook, with the next support being $1,960.

technical levels

XAU/USD

Overview
Last price today 1979.48
Today Change Daily 1.72
today’s daily variation 0.09
daily opening today 1977.76
Trends
daily SMA20 1984.35
daily SMA50 1992.3
daily SMA100 1938.6
Daily SMA200 1834.73
levels
previous daily high 1983.17
previous daily low 1953.41
Previous Weekly High 1985.3
previous weekly low 1936.77
Previous Monthly High 2079.76
Previous monthly minimum 1932.12
Fibonacci daily 38.2 1971.8
Fibonacci 61.8% daily 1964.78
Daily Pivot Point S1 1959.72
Daily Pivot Point S2 1941.69
Daily Pivot Point S3 1929.96
Daily Pivot Point R1 1989.48
Daily Pivot Point R2 2001.21
Daily Pivot Point R3 2019.24

Source: Fx Street

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