Gold Price Forecast XAU/USD – Traders Bracing for Heightened Volatility Following NFP Release

Gold futures are inching higher on Friday, mirroring the price action in the U.S. Dollar while in a position to post a weekly loss. Treasury yields are sharply lower, but the prospects of further interest rate hikes throughout the week contributed to losses that appear to be too much to recover in just one session.

At 10:19 GMT, April Comex gold futures are trading $1837.10, up $2.50 or +0.14%. On Thursday, the SPDR Gold Shares ETF (GLD) settled at $170.19, up $1.65 or +0.98%.

Traders are also positioning ahead of today’s U.S. Non-Farm Payrolls report due at 13:30 GMT. The data could help determine the likely path of the Federal Reserve’s rate-tightening cycle.

The NFP report is expected to show non-farm payrolls increased by 205,000 in February, according to economists polled by Reuters. The unemployment rate is expected to remain steady at 3.4%.

Hawkish comments from Federal Reserve Chairman Jerome Powell on Tuesday and Wednesday triggered a steep sell-off. Powell warned of higher and potentially faster interest rate hikes to contain high inflation. Higher interest rates to control rising prices discourage investment in non-yielding gold.

Daily April Comex Gold Technical Analysis

The main trend is down according to the daily swing chart. A trade through the pair of main bottoms at $1813.40 and $1810.80 will signal a resumption of the downtrend. A move through $1864.40 will change the main trend to up.

On the downside, the closest support is a 50% level at $1811.50. The nearest resistance is a 50% level at $1843.40, followed by a resistance cluster at $1862.40 – $1864.40.

Daily April Comex Gold Technical Forecast

Trader reaction to the 50% level at $1843.40 is likely to determine the direction of the April Comex gold futures contract on Friday.

Bearish Scenario

A sustained move under $1843.40 will indicate the presence of sellers. If this creates enough downside momentum then look for a break into the support cluster at $1813.40 – $1810.80.

Taking out $1810.80 could trigger an acceleration into a Fibonacci level at $1772.80.

Bullish Scenario

A sustained move over $1843.40 will signal the presence of buyers. This could create the momentum needed to challenge the resistance cluster at $1862.40 – $1864.40. The latter is a potential trigger point for an acceleration into $1889.50.