Gold prices dipped on Thursday ahead of the Non-Farm Payrolls report due on August 6. The drop in gold prices comes as investors start to raise bets on early tapering once more, following a series of hawkish comments from key figures within the US Federal Reserve.
After rising early on Wednesday following the downbeat private-sector employment data from the ADP, gold prices came under pressure later in Wednesday’s New York session. On Thursday, gold continued the downward streak as the Fed’s Richard Clarida suggested that tapering could begin as early as late 2021. A stronger-than-expected NFP report bolsters a case for early tapering, which is ominous for gold prices.
Ahead of the NFP report, here is the potential playbook for the XAU/USD pair.
Technical Levels to Watch
The downward move on the XAU/USD is challenging the lower border of the channel. A strong NFP report could initiate a total breakdown of this channel, opening the door to downside targets at 1789.49 and 1763.30. 1741.01 could be put on notice if the decline is extensive.
On the flip side, a poorer-than-expected NFP gives the Fed room to postpone the commencement of tapering, which weakens the position of the US Dollar in the XAU/USD pair. Bulls can then look to mount an assault on 1815.20, targeting upside targets at the 1828/1840 price wall and 1860.77.
Gold Price (XAU/USD): Daily Chart
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