Gold Price Forecast: XAU/USD struggles above 200-DMA, focus on US ADP, ISM PMI

• Gold buyers lurk behind 200-DMA so far during the week, attack intraday top of late.
• Upbeat market sentiment, US dollar’s hesitant rebound keeps buyers hopeful.
• US ADP Employment Change, ISM Manufacturing PMI for August eyed ahead of Friday’s NFP.
• Gold Weekly Forecast: XAU/USD could target $1,830 next ahead of NFP

Gold (XAU/USD) keeps the previous day’s recovery moves around $1,815, despite the latest pullback from the intraday top, as European traders brush their screen for Wednesday’s tasks. That said, the yellow metal rises 0.07% on a day while preserving the weekly pattern of trading above 200-DMA.

In doing so, the gold prices track risk barometers like the US stock futures and Treasury yields to stay firmer. It should be noted, however, that the US Dollar Index (DXY) rebound, up 0.08% intraday by the press time around 92.73, probes gold buyers.

Mixed concerns over the upcoming moves of the US and European central banks join a lack of clarity over the coronavirus concerns to portray the cautious optimism in the markets. Recently, chatters over the European Central Bank’s (ECB) bond purchase cut gained momentum due to strong inflation data from the bloc. Though, US data kept confusing traders and highlight incoming data flow, as previously signaled by Fed Chairman Jerome Powell.

The preliminary reading of the Eurozone Consumer Price Index (CPI) for August jumped 3.0% YoY, the highest in over a decade whereas the US Housing Price Index for June eased but the S&P/Case Shiller Home Price Index jumped to 19.1% YoY during the stated month. Further, the August month’s Conference Board measure of Consumer Confidence fell to 113.8 from 125.1 whereas the Chicago Purchasing Managers’ Index (PMI) for August dropped to 66.8 versus 68.0 expected and 73.4 prior.

On a different page, the latest figures from Australia and New Zealand seem grim, China and the UK offer receding COVID-19 numbers to keep the buyers hopeful. It should be noted that the political jitters in Japan, concerning fresh elections, join the Sino–US tussles to challenge the bulls.

Amid these plays, S&P 500 Futures rise 0.30% by the press time whereas the US 10-year Treasury yields stretch the previous day’s upside to 1.33%, up to three basis points (bps).

As gold traders seek clarity over Fed Chairman Powell’s monetary policy outlook, Friday’s US jobs report for August become crucial for markets. Ahead of that, the US ADP Employment Change and ISM Manufacturing PMI for August can provide intermediate direction. Forecasts favor a firmer print of the early signal for Friday’s NFP, contrasts to a downbeat ISM Manufacturing PMI figures. If these data match mixed concerns, the gold prices may keep the latest rebound but hesitantly.

Technical analysis

Gold defends Friday’s upside break of 200-DMA so far during the week.

The commodity’s ability to stay above the key moving average joins bullish MACD to back the upside hopes.

However, a 13-day-old rising channel’s upper line near $1,827, followed by highs marked during July and August, respectively around $1,835 and $1,831, become tough nuts to crack for the bulls.

Meanwhile, the 200-DMA level of $1,809 guards gold’s immediate downside ahead of the confluence of the previous resistance line from June 01 and the lower line of the stated channel around $1,795.

Hence, gold prices pick up bids inside a crucial trading region between $1,795 and $1,835 ahead of important data/events.

Gold: Daily chart

Trend: Further upside expected