Gold struggled to extend its rebound from $1,750 as the US dollar remained resilient despite a disappointing US jobs report. While gold spiked above $1,780 initially on the jobs data, the dollar index rebounded and gold failed to break above the 20-day simple moving average, with traders remaining focused on upcoming US inflation data and the Federal Reserve's tapering plans. Technical indicators point to continued downside risk for gold prices below key resistance levels.

1. XAU/USD On The Back Foot As NFP
Fails To Alter Taper Prospects

2. Points To Be Covered Today:
• Gold Struggled To Extend Its Rebound
• Gold Failed To Make A Decisive Move
• The US Dollar Index
• The Core Inflation
• Gold Technical Outlook
• Gold Sentimental Poll

3. Gold Spiked Above
• Gold spiked above $1,780 on Friday but lost its
bullish momentum.
• Despite the disappointing September jobs report,
dollar stays resilient.
• Focus shifts to US September CPI inflation data.
• After ending the previous week on a firm footing,
the XAU/USD pair continued to edge higher on
Monday and reached a 10-day top of $1,770.

4. Gold Struggled To Extend Its Rebound
• Nevertheless, gold struggled to extend its
rebound amid dollar resilience and formed a
horizontal trading channel with a lower limit of
$1,750.
• Although the pair broke above that channel on
Friday and touched a 15-day high of $1,781 with
the initial reaction to the disappointing
September jobs report from the US, it retreated
below $1,770 ahead of the weekend.

5. The Risk-Averse Market Environment
• The risk-averse market environment at the start
of the week helped the precious metal find
demand.
• The ongoing energy crisis and heightened
concerns over US lawmakers failing to come to
terms to raise the debt limit caused investors to
seek refuge.
• The only data from the US showed on Monday
that Factory Orders increased by 1.2% on a
monthly basis in August but this reading received
little to no market reaction.

6. The Dismal Market Mood
• Reflecting the dismal market mood, the S&P 500
Index dropped to its lowest level since late July at
4,278 on Tuesday.
• However, the greenback also managed to
outperform its rivals as a safe haven and capped
XAU/USD’s upside.
• On Tuesday, the ISM Services PMI arrived at 61.9
in September, compared to analysts’ estimate of
60, but this print got largely ignored by market
participants.

7. The Automatic Data Processing
• On Wednesday, the Automatic Data
Processing (ADP) Research Institute
announced that private sector employment in
the US rose by 568,000, surpassing the market
consensus of 428,000.
• In the meantime, the US Senate passed the
bill to raise the debt ceiling by $408 billion
through November, easing concerns over a
possible default.

8. Gold Failed To Make A Decisive Move
• Moreover, Russian President Vladimir Putin said
that they will be ramping up gas output to ease
the pressure on energy prices in Europe and
provided an additional boost to risk sentiment.
• Although major global equity indexes gained
traction in the second half of the week to mirror
the positive shift witnessed in risk appetite, gold
failed to make a decisive move in either direction
as rising US Treasury bond yields supported the
dollar.

9. 10-year US T-bond Yield
• The benchmark 10-year US T-bond yield gained
more than 3% on Thursday and reached its
highest level in more than four months above
1.6% on Friday.
• Finally, the US Bureau of Labor Statistics reported
that Nonfarm Payrolls (NFP) rose by 194,000 in
September.
• This reading missed analysts' forecast of 500,000
by a wide margin and triggered a USD selloff.

10. The US Dollar Index
• However, the underlying details of the
publication revealed that August's print got
revised higher to 366,000 from 235,000 and
the Unemployment Rate declined to 4.8%
from 5.2%.
• The US Dollar Index, which dropped to a daily
low of 93.94 after the NFP data, didn't have a
difficult time rebounding above 94.00 and
capped gold's upside.

11. The Consumer Price Index (CPI)
• There won’t be any high-impact data releases at
the start of the week.
• On Tuesday, the August jobs report from the UK
and the ZEW Survey from Germany will be
featured in the European economic docket, which
are unlikely to have a significant impact on
XAU/USD’s movements.
• On Wednesday, the US Bureau of Labor Statistics
will release the Consumer Price Index (CPI) data
for September. Investors forecast the annual CPI
to tick up to 5.4% from 5.3% in August.

12. The Core Inflation
• Even if the core inflation in the US turns out to be
softer than expected in September, this report by
itself is unlikely to change the market’s view on
the Fed’s tapering plan.
• In fact, the market reaction to the September
labour market report showed that the
expectation for a reduction in asset purchases
remains intact.
• Moreover, investors could opt out to remain on
the sidelines before the FOMC published the
September Meeting Minutes later in the day.

13. The Core Inflation - I
• On Thursday, the US Department of
Labor’s weekly Initial Jobless Claims data
will be looked upon for fresh impetus
ahead of Friday’s Retail Sales report,
which is anticipated to show a modest
contraction in September.

14. Gold Technical Outlook
• The technical outlook remains bearish with
gold failing to break above the 20-day SMA for
the 18th straight trading day.
• Additionally, the Relative Strength Index (RSI)
indicator on the daily chart stays slightly
below 50, confirming the view that sellers are
looking to remain in control of XAU/USD's
action.

15. Gold Technical Outlook - I
• On the downside, the initial support is located at
$1,750 (lower limit of the weekly channel) ahead
of $1,730 (static level) and $1,720 (late
September low).
• The first hurdle aligns at $1,763 (20-day SMA)
ahead of $1,780 (October 8 high, 50- day SMA).
• Only a daily close above the latter could open the
door for a prolonged rebound toward $1,800,
where the 100-day SMA, 200-day SMA and the
Fibonacci 50% retracement of the April-June rally
meet.

16. Gold Technical Outlook - II

17. Gold Sentimental Poll
• The FXStreet Forecast Poll points to a slightly
bullish bias in the near term with the one-
week target sitting at $1,767.
• The one-month view paints a mixed picture
with 33% of experts holding a bearish view
against 42% bullish.
• Furthermore, the average forecast of $1,747
points to analysts' indecisiveness for the one-
month time frame.

18. Gold Sentimental Poll - I

19. Gold Sentimental Poll - II

20. XAU/USD On The Back Foot As NFP
Fails To Alter Taper Prospects

21. Thanks for listening
XAU/USD On The Back Foot As NFP
Fails To Alter Taper Prospects