Gold Price Forecast: XAU/USD aims to test January high at $2,079

XAU/USD Current price: 2,061.48

• United States Treasury yields plummeted following mixed employment-related data.
• The Nonfarm Payrolls report is expected to show that 180K new positions were added in January.
• XAU/USD is firmly bullish in the near term and looks to test record highs.

Gold price resumed its advance and XAU/USD reached a fresh weekly high of $2,065.54, as financial markets left behind the Federal Reserve (Fed) announcement and focused on United States (US) data. The economy keeps proving resilient as the  ISM Manufacturing PMI improved to 49.1 in January from 47.1 in the previous month. Additionally, Q4 Nonfarm Productivity rose 3.2%, beating expectations, while Unit Labor Cost in the same period increased 0.5%, less than the 1.7% expected.

Wall Street turned positive, while government bond yields plunged, adding pressure on the Greenback. The 10-year Treasury note currently yields 3.83% after peaking at around 4.06% on  Wednesday, while the 2-year note offers 4.17%.

The focus now shifts to the January US Nonfarm Payrolls (NFP) report. Fed Chairman Jerome Powell noted after the FOMC meeting that: “Inflation has eased from its highs without a significant increase in unemployment,” taking off some of the pressure on the labor market. The NFP report is expected to show the country added 180K new jobs in January, while the Unemployment Rate is foreseen at 3.8%, ticking modestly higher.

XAU/USD short-term technical outlook

The XAU/USD pair holds on to gains and trades around the $2,060 level up for a fourth consecutive day. Technically, the pair has room to extend its advance towards January high at $2,078.99. In the daily chart, the bright metal bounced sharply from a flat 20 Simple Moving Average (SMA) while the longer moving averages advance below it. The Relative Strength Index (RSI) indicator aims firmly north well above its midline, while the Momentum indicator lags, hovering around neutral levels.

In the near term, and according to the 4-hour chart, bulls are in full control. Technical indicators head north almost vertically, while XAU/USD develops above all its moving averages. Furthermore, the 20 SMA extended its advance above the 100 SMA and is about to surpass the 200 SMA, providing dynamic support at around $2,038.40.

Support levels: 2,038.40 2,022.75 2,009.10

Resistance levels: 2,065.60 2,079.00 2,088.50