XAU/USD Points To A Potential Move Higher, NFP Awaited

1. XAU/USD Points To A Potential
Move Higher, NFP Awaited

2. Points To Be Covered Today:
• Gold’s 4H Technical Setup Remains In Favor
Of Bullish Traders
• A Four-Hourly Candlestick
• Gold Jumped To Near One-month
• The US Dollar Weakened
• A Fresh Bullish Breakout
• Gold (XAU/USD) Prices Step Back

3. Gold’s 4H Technical Setup Remains In
Favor Of Bullish Traders
• “Investors remain cautious ahead of the critical
US employment, as gold attempts a bounce amid
a mixed sentiment.
• The US dollar is licking its wounds amid
expectations of the NFP reading underscoring the
market consensus of 750K in August and 943K
booked in July.
• Gold’s fate hinges on the NFP outcome, with
risks skewed to the upside while it defends the
200-Daily Moving Average (DMA).”

4. A Four-Hourly Candlestick
• “Acceptance above the upward-sloping 21-Simple
Moving Average (SMA) at $1813 could call for a
fresh advance towards the falling trendline
resistance at $1817.
• “A four-hourly candlestick close above $1817 will
confirm a symmetrical triangle breakout, with a
test of the August highs at $1823 on the cards.
• Further up, the $1830 round figure will be put to
test.”

5. A Four-Hourly Candlestick - I
• “A strong cushion is seen at $1806, which is
the confluence of the bullish 50-SMA and
rising trendline support.
• If the latter gives way, then a downside
breakout from the triangle will get validated,
opening floors for deeper losses towards the
$1793 level, where the 100 and 200-SMAs
intersect.”
•

6. Gold: Four-Hour Chart - II

7. Gold Jumped To Near One-month
• Gold jumped to near one-month tops in reaction
to disappointing headline NFP print.
• Sustained USD selling bias and a turnaround in
the risk sentiment remained supportive.
• A sharp spike in the US bond yields might keep a
lid on any further gains for the metal.
• Gold caught some fresh bids during the early
North American session and shot to near one-
month tops, around the $1,830 region in reaction
to disappointing headline NFP print

8. The US Dollar Weakened
• The US dollar weakened across the board
after the closely-watched US monthly jobs
report showed that the US economy added
235K new jobs in August.
• This was well below the previous month's
upwardly revised reading of 1053K and
missed expectations by a big margin.

9. Investors Pushed Back Their
Expectations
• Investors pushed back their expectations for
the likely timing when the Fed will begin
rolling back its massive pandemic-era
stimulus.
• This, in turn, exerted some additional pressure
on the already weaker US dollar and provided
a goodish lift to dollar-denominated
commodities, including gold.

10. The US Labour Market Recovery
• Meanwhile, the data now seemed to have
raised doubts about the US labour market
recovery and fueled worries about the
potential risks associated with the fast-
spreading Delta variant of the coronavirus.
• This was evident from a weaker tone around
equity markets, which further benefitted the
safe-haven XAU/USD.

11. The Unemployment Rate Fell In Line
• That said, a sharp spike in the US Treasury bond
yields held bulls from placing aggressive bets and
kept a lid on any further gains for the non-
yielding gold.
• Additional details revealed that
the unemployment rate fell in line with market
expectations, to 5.2% from 5.4% in July.
• Moreover, stronger wage growth data seems to
have kept hopes alive for an imminent taper
announcement at the November FOMC meeting.

12. A Fresh Bullish Breakout
• Even from a technical perspective, a sustained
move beyond the $1,832-34 supply zone is
needed to confirm a fresh bullish breakout.
• This makes it prudent to wait for a strong follow-
through buying before positioning for a further
near-term appreciating move.
• A convincing breakthrough the mentioned
barrier has the potential to lift gold prices further
towards the $1,852 region en-route the next
major hurdle near the $1,868-70 zone.

13. A Fresh Bullish Breakout - I

14. Gold Regained Positive Traction
• Gold prints mild gains inside bullish chart pattern.
• USD weakness, increasing odds of softer NFP
keeps buyers hopeful.
• Covid jitters, Japanese politics and US ISM
Services PMI are important too.
• Gold regained positive traction on the last day of
the week and reversed the overnight losses,
though lacked any strong follow-through buying.

15. The US Dollar Bulls On The Defensive
• Investors now seem convinced that the Fed will
wait for a longer period before rolling back its
massive pandemic-era stimulus.
• Moreover, Wednesday's disappointing ADP
report raised doubts about the US labour market
recovery and further dampened prospects for an
early Fed liftoff.
• This, in turn, kept the US dollar bulls on the
defensive near one-month lows and was seen as
a key factor that provided a modest lift to the
dollar-denominated commodity.

16. The XAU/USD Is Likely To Prolong
• That said, the prevalent risk-on environment continued acting
as a headwind for traditional safe-haven assets and kept a lid
on any meaningful rally for gold, at least for the time being.
• Traders also seemed reluctant to place any aggressive bets
ahead of Friday's release of the closely-watched US monthly
jobs data.
• The popularly known NFP report could provide fresh clues
about the likely timing of the Fed's tapering plan and provide
a fresh directional impetus to the non-yielding gold.
• In the meantime, the XAU/USD is likely to prolong its range-
bound price action witnessed since the beginning of this
week.

17. The Fed's Tapering Plan
• The popularly known NFP report could
provide fresh clues about the likely timing of
the Fed's tapering plan and provide a fresh
directional impetus to the non-yielding gold.
• In the meantime, the XAU/USD is likely to
prolong its range-bound price action
witnessed since the beginning of this week.

18. Gold Might Then Accelerate The
Momentum
• Hence, it will be prudent to wait for some strong
follow-through buying before positioning for any
further appreciating move, back towards the $1,832-34
supply zone.
• A sustained move beyond will mark a fresh bullish
breakout and set the stage for an extension of the
recent strong bounce from the $1,686 region, or multi-
month lows touched on August 9.
• Gold might then accelerate the momentum towards
the $1,852 region en-route the next major hurdle near
the $1,869-70 area.

19. Gold (XAU/USD) Prices Step Back
• Gold (XAU/USD) prices step back from an
intraday high surrounding $1,815, up 0.12% on a
day near $1,812 heading into Friday’s European
session.
• In doing so, the yellow metal rises the most in
three days inside a bullish chart pattern ahead of
the key US Nonfarm Payrolls (NFP).
• Gold prices cheer upbeat market sentiment and
weaker US dollar to stay firmer. That said, the US
Dollar Index (DXY) refreshed monthly low in Asia
before recently paring the losses to 92.20.

20. XAU/USD Points To A Potential
Move Higher, NFP Awaited

21. Thanks for listening
XAU/USD Points To A Potential
Move Higher, NFP Awaited