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Gold Price Forecast: XAU/USD aims for a pullback above $1,700 on lower consensus for US NFP

Gold price (XAU/USD) has attempted to build a cushion around $1,690.00 on Thursday after displaying a sheer downside move. The precious metal is eyeing a pullback move, which might push the gold prices above the psychological resistance of $1,700.00. However, the downside will remain favored as the US dollar index (DXY) is hovering around its fresh two-decade high at 109.98.

The gold prices are facing wrath despite the lower consensus for the US Nonfarm Payrolls (NFP) data. According to the estimates, the US economy generated 300k jobs in August, lower than the prior release of 528k. Also, the Unemployment Rate is seen as stable at 3.5%. As the US economy is operating at full employment, room for more job additions has squeezed dramatically.

Apart from that, US corporate has also ditched the recruitment process due to an expectation of a slowdown in the overall demand.

Meanwhile, the DXY has turned sideways after remaining short of hitting the psychological resistance of 110.00. The catalyst that could halt the DXY’s dream rally is the Average Hourly Earnings, which is expected to improve by 10 basis points (bps) to 5.3%. Price pressures are soaring in the US economy and households need higher paychecks to offset higher payouts. Therefore, a subpar improvement in earnings data seems not lucrative for the DXY bulls.

Gold technical analysis
Gold prices are declining firmly towards the monthly lows placed at $1,680.91, recorded on July 21. The 20-and 50-period Exponential Moving Averages (EMAs) at $1,715.12 and $1,730.00 respectively are scaling towards the south, which adds to the downside filters.

Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates more weakness ahead.

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