Gold Price Upside Prevails Ahead of US Jobs Data Release

Summary:
• Increasing prospects of US interest rate cuts have kept gold prices up, but NFP data could alter the trajectory.

Gold prices stayed on the ascending trajectory on Friday, as investors continued to bet on US interest rate cuts. Spot market gold traded at $2,365 per ounce at the time of writing, up by 0.3 percent on the daily chart. Similarly, futures gold was up by 0.1 percent to trade at $2,372, according to data from COMEX. Gold is on course to record successive weekly gains for the first time since mid-May, underlining the jitters around the US dollar strength.

The US dollar has been under pressure in recent days, with the Federal Reserve Chairman Jerome Powell sounding confident earlier this week that inflation was on the downward trajectory. However, the overall tone of FOMC members has been non-committal, as they stated that more data is needed to confirm that inflation could sustainably be kept on the downtrend.

Meanwhile, yields on US treasury bonds have declined to ease pressure on non-yielding gold. Benchmark 10-year bonds were at 4.338 percent at the time of writing, which will provide propulsion for gold prices as the markets await US NFP data. Also, gold price has support from the geopolitical front, after the Israel-Hezbollah conflict was exacerbated on Thursday by the latter’s firing of over 200 missiles into Israel’s territory.

Elsewhere, a majority win by France’s far-right National Rally party in Sunday’s second-round elections could increase jitters around the Eurozone’s second-largest economy and inject new volatility into XAUUSD. However, the greatest interest will be drawn from Friday’s release of US  Non Farm Payrolls (NFP) data. The data will shed light on the US jobs market and will be central to the Fed’s interest rate decision making .

Technical analysis

The momentum on gold price calls for further upside if the price stays above $2,366 in the spot market. The bulls will likely encounter the first resistance at $2,366, but a break above that mark could strengthen the momentum to test $2,370. Conversely, a move below $2,362 will favour the sellers to take control. The first support could come at $2,358, and a break below that mark could render the upside narrative invalid. Also, it could strengthen the downward momentum to test $2,354.