Gold price trades with positive bias below $3,400, multi-week top ahead of US NFP

• Gold price regains positive traction following Thursday’s late pullback from a multi-week high.
• The US-China trade talks optimism might hold back the XAU/USD bulls from placing fresh bets.
• A modest USD uptick might contribute to capping the commodity ahead of the US NFP report.

Gold price (XAU/USD) attracts some dip-buying during the Asian session on Friday and reverses a part of the previous day’s retracement slide from levels just above the $3,400 mark or over a four-week peak. The commodity, however, remains confined in a multi-day-old range as traders seem reluctant to place aggressive bets and opt to wait for the release of the closely-watched US monthly employment details. The popularly known Nonfarm Payrolls (NFP) report will play a key role in influencing market expectations about the Federal Reserve’s (Fed) rate-cut path, which, in turn, will drive the US Dollar (USD) and provide a fresh impetus to the non-yielding yellow metal.

Heading into the key data risk, some repositioning trade assists the USD to gain some positive traction and move away from its lowest level since April 22 touched on Thursday. Moreover, the optimism over renewed trade talks between the US and China – the world’s two largest economies – might contribute to capping the upside for the safe-haven Gold price. This makes it prudent to wait for sustained strength and acceptance above the $3,400 round figure before traders start positioning for any further near-term appreciating move. Nevertheless, the XAU/USD pair remains on track to register modest weekly gains and the supportive fundamental backdrop favors bullish traders.

Daily Digest Market Movers: Gold price benefits from repositioning trades ahead of US NFP report

• US President Donald Trump and Chinese leader Xi Jinping agreed to further talks to settle trade disputes. Moreover, Trump said that the call was focused almost entirely on trade and resulted in a very positive conclusion, triggering an intraday pullback in the Gold price from over a four-week high on Thursday.
• The initial market reaction, however, turns out to be short-lived on the back of Trump’s rapidly shifting stance on trade policies. Adding to this, some repositioning trade ahead of the US Nonfarm Payrolls (NFP) report assists the XAU/USD pair to regain some positive traction during the Asian session on Friday.
• The impactful US monthly employment data is expected to show that the world’s largest economy added 130,000 new jobs in May following the stronger-than-expected 177,000 rise recorded in the previous month. Meanwhile, the Unemployment Rate is anticipated to hold steady at 4.2% during the reported month.
• A host of other employment readings released this week pointed to a cooling in the US labor market, which should give the Federal Reserve more impetus to cut interest rates. Traders are currently pricing in the possibility that the US central bank will deliver at least two 25 basis points rate cuts by the year-end.
• However, recent comments from a slew of Fed officials suggested that the US central bank might stick to the wait-and-see approach amid persistent trade-related uncertainties. Hence, the crucial US employment details will be looked upon for fresh insight into the Fed’s policy outlook and drive the US Dollar.

Gold price bulls might now wait for sustained strength beyond $3,400 before placing fresh bets

From a technical perspective, the top boundary of a multi-day-old range, around the $3,400 round figure, now seems to have emerged as an immediate barrier. Given that oscillators on the daily chart are holding in positive territory, a sustained strength beyond the said handle will be seen as a fresh trigger for bulls. The subsequent move-up could lift the Gold price to the $3,433-3,435 intermediate hurdle en route to the $3,500 neighborhood, or the all-time peak set in April.

On the flip side, the $3,334-3,333 area, or the lower end of the range, might continue to protect the immediate downside. Some follow-through selling, leading to a subsequent slide below the $3,326-3,324 horizontal resistance breakpoint, now turned support, could drag the Gold price below the $3,300 round figure, to the $3,286-3,285 region.

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