Gold Price Forecast: XAU/USD bulls move in on a 50% mean reversion area ahead of NFP
- Gold holds steady ahead of key US jobs data.
- Bears are lurking in a key area on the charts. testing a 50% mean reversion area.
Gold price was firmer on Friday as the US Dollar tailed off after data showed that weekly US jobless claims grew more than expected. This led to the market thinking twice with respect to the Federal Reserve's next move.
At the time of writing, the US Dollar index, DXY, was down 0.13%, making the Gold price less expensive for buyers in other currencies. Gold price is holding in the $1,830s on the day so far ahead of the key Nonfarm Payrolls.
Meanwhile, 'the number of people submitting jobless claims in the US increased. Initial claims rose to 211k in the week to 4 March, while continuing claims (from the prior week) lifted to 1,718k,'' analysts at ANZ Bank explained.
''This latest data indicates the labour market may be starting to cool, but this data tends to be very volatile so the market will be looking for further evidence that labour demand is cooling. One measure indicating US companies are starting to cut back their workforce is Challenger Job Cuts data, which shows 77,000 jobs were cut during February,'' the analysts added.
''That is not as much as the January figure of 109,243 but it is 410% higher than the previous February, and it is the highest number of jobs cut in any February since 2009. Most of the cuts are coming in the technology, retail and financial sectors.''
Next key US data
Meanwhile, the forthcoming releases of February US labour and Consumer Price Inflation data will be instrumental in for traders who will be trying to preempt the Federal Open Market Committee's next move at the March meeting. The run of strong US economic data releases last month had already cemented the risk of a higher for longer outlook for Fed interest rates.
Analysts at TD Securities explained that they look for payroll gains to mean-revert to 230k in February following the gangbuster report that saw job creation surge to 517k in January. ''We also expect the unemployment rate to remain unchanged at a historically low level; while average hourly earnings likely accelerated to a 0.4% m/m gain, lifting the y/y measure to a still-elevated 4.8%.''
Gold price technical analysis
Gold price crossed back above the $1,825 mark in the pursuit of the neckline of M-formation's neckline. There is a support location down at $1,804 with resistance above $1,850. If the bears move in again, then there will be prospects of a move to test the Gold price 200 DMA in the coming days with the $1,1770s eyed in that regard.