Gold Price Forecast

Gold price extended Wednesday‘s rebound and hit the highest levels in three days at $1783 on Thursday, as the demand for the safe-haven assets was on the rise, including the US dollar. Mounting fears over the economic impact of the Delta covid strain flareups in Asia and Europe dented risk appetite. Meanwhile, investors also adjusted their positions ahead of the critical US Nonfarm Payrolls (NFP), especially in light of the recent sell-off in gold price and the Fed’s hawkish shift in its monetary policy. The recovery momentum in gold price was also backed by the ongoing retreat in the US rates, courtesy of the reduced demand for higher-yielding assets.

Gold price is holding onto the recent gains in the lead-up to the NFP showdown. The US labor market report could likely throw fresh light into the timeline of the Fed‘s monetary policy shift, as employment progress remains one of the key goals for the world’s most powerful central bank. The US economy is expected to add 69K jobs in June after the terrible 559K numbers seen in May. The Unemployment Rate is seen dropping to 5.7% last month. Encouraging headline NFP data could bolster the Feds hawkish expectations, which could have a significant negative impact on gold price. Ahead of the critical data release, gold price could maintain its range play below the $1800 mark, as investors refrain from placing any big directional bets on the precious metal.

As observed, gold price is consolidating the two-day recovery from two-month lows of $1751. At the time of writing, the bulls struggle below $1780, awaiting fresh trading impetus.

The 14-day Relative Strength Index (RSI) is flatlined, sitting outside the oversold territory but well below the central line. This implies that the downside bias remains intact for gold price.

On an NFP blowout, gold price could reverse its uptrend and drop back towards the $1751 support area.

Ahead of that the previous weeks low at $1761 could offer some support to the bullish traders.

Alternatively, a data disappointment could possibly pour cold water on the Feds tapering and tightening expectations, in turn, offering extra zest to gold bulls.

The 100-Daily Moving Average (DMA) at $1790 will emerge as the first critical upside hurdle to clear.

A daily closing above the latter could negate the bearish near-term outlook, opening gates for a test of the $1800 threshold.

The next relevant upside target appears at the downward-pointing 21-DMA at $1818.

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