Gold Price Forecast: XAU/USD buyers take out $2,330 hurdle ahead of US jobs data, Powell

• Gold price posts small gains early Tuesday, following a positive start to the Big week. 
• The US Dollar recovers overnight losses, as US Treasury yields retreat amid risk-off mood.  
• Gold traders turn cautious ahead of US jobs data, Fed Chair Powell’s speech.
• Gold price regains key 21-day SMA, as the daily RSI flips bullish. 50-day SMA is the next topside barrier.

Gold price is looking to build on the previous upswing in the Asian session on Tuesday. Gold buyers, however, could turn cautious heading into the key US JOLTs Job Openings data and US Federal Reserve (Fed) Chair Jerome Powell’s speech later in the day.

All eyes turn to Fed Chair Jerome Powell’s speech

Despite the upbeat momentum in Gold price, buyers seem to be struggling, as the US Dollar recovers overnight losses amid a softer risk tone. The Greenback also capitalizes on the fresh leg higher in the USD/JPY pair, as the Japanese Yen continues to fall toward the 162.00 mark.

The latest gains in Gold price could be attributed to a retreat in the US Treasury bond yields across the curve, as traders resort to profit-taking ahead of critical US event risks. The benchmark US 10-year Treasury bond yields pull back after facing resistance at the key 4.50% level.

Looking ahead, the expected decline in the US JOLTs Job Openings data to 7.9M in May from April’s 8.05M could provide signs of some loosening in the labor market, fanning September Fed rate cut expectations. Powell’s words, however, in the Policy Panel at the European Central Bank (ECB) Forum in Sintra are likely to play a pivotal role in the Gold price action.

Markets are currently pricing in a 64% chance of the Fed cutting interest rates in September and another cut in December, according to the CME Group’s FedWatch Tool.

On Monday, Gold price witnessed a good two-way price movement, initially trading with caution starting a big week. Gold price also took a hit after the US Dollar jumped notwithstanding the mixed US ISM Manufacturing PMI data. The ISM's manufacturing PMI slipped to 48.5 last month from 48.7 in May. The ISM Manufacturing Price Paid sub-index also dropped sharply to 52.1 in June from May’s 57.0, missing the expected 55.9 print.

However, the uptick of the US Dollar was short-lived, as traders weighed the downbeat data, which supported the Fed's bets for a policy pivot as early as September. The renewed US Dollar weakness helped Gold price stage a decent recovery, further aided by a short-covering by the shorter-term traders and some perceived bargain buying in the cash market.

Gold price technical analysis: Daily chart

 

With the 14-day Relative Strength Index (RSI) regaining the 50 level and Gold price closing Monday above the 21-day Simple Moving Average (SMA) at $2,328, buyers are back in the game.

However, they need to seek a daily candlestick closing above the immediate 50-day SMA barrier at $2,338 to resume the recovery from the monthly low of $2,287. 

The next relevant upside barrier is aligned at the $2,350 psychological level, above which the two-week high of $2,369 could be challenged.

On the flip side, the 21-day SMA resistance-turned-support at $2,328 could offer immediate cushion. A sustained move below the latter will test the previous day’s low of $2,319.

Additional declines could threaten the $2,300 threshold, below which the $2,290 support area will come into play. Around that level, the previous week’s low and the June low hang around.