Gold Price Forecast: XAU/USD jumps to fresh weekly tops, above $1,825 on weaker ADP report
- Gold caught some bids during the early North American session amid renewed USD selling bias.
- Disappointing ADP report reaffirmed dovish Fed expectations and provided an additional boost.
- The risk-off impulse in the markets extended some additional support to the safe-haven metal.
- Gold Price Forecast: XAU/USD awaits a range breakout but not so soon, NFP in focus
Gold finally broke out of its intraday consolidation phase and shot to fresh weekly tops, just above the $1,825 level during the early North American session. The latest leg of a sudden spike over the past hour or so could be attributed to the emergence of some selling around the US dollar, which tends to benefit the dollar-denominated commodity. The already weaker greenback lost some ground following the disappointing release of the ADP report, which showed that private-sector employment in the US rose by 330K in July. This was well below consensus estimates pointing to a reading of 695K and the previous month's downwardly revised reading of 680K.
The data validated Fed Chair Jerome Powell's recent comments that they were some ways away from substantial progress on jobs. This, in turn, reinforced market expectations that the US central bank will wait for a longer period before slowing its massive monetary support. This was seen as another factor that provided an additional boost to the non-yielding gold. Apart from this, the risk-off impulse in the markets further acted as a tailwind for the safe-haven precious metal and contributed to the intraday positive move. Worries that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery continued weighing on investors' sentiment, which was evident from a generally softer tone around the equity markets.
With the latest leg up, gold has now moved back above the very important 200-day SMA and within the striking distance of the double-top resistance near the $1,832-34 supply zone. A sustained move beyond will be seen as a fresh trigger for bullish traders and set the stage for additional gains. That said, investors might refrain from placing any aggressive bullish bets, rather prefer to wait on the sidelines ahead of Friday's release of the closely-watched US monthly jobs report (NFP). This, in turn, might keep a lid on any further appreciating move for gold, at least for the time being.
Technical levels to watch