Gold Price Forecast: XAU/USD bears move in as the NFP dust settles

Gold price rallied on the knee-jerk and relatively benign Nonfarm Payrolls outcome. Although the data showed a contraction in the headline from the prior month with large revisions to the downside for the prior, the Unemployment Rate was 0.1% lower compared to last month which is another positive in a series of robust US numbers of late. Nevertheless, XAU/USD popped to a high of $1,928.40 from a low of $1.920. 

Meanwhile, 15 minutes after the data, the Gold price is falling and traded back below $1,920. 

Nonfarm Payrolls 

Nonfarm Payrolls (NFP) in the US rose 209,000 in June, the US Bureau of Labor Statistics reported on Friday. This reading came in below the market expectation of 225,000. May's increase of 339,000 got revised lower to 306,000.

The Unemployment Rate edged lower to 3.6% from 3.7% as expected and the annual wage inflation, as measured by the Average Hourly Earnings, stood unchanged at 4.4%, compared to analysts' estimate of 4.2%. Finally, the Labor Force Participation Rate held steady at 62.6%, while the Unemployment Rate fell 0.1% to 6.9% from 6.7%.

All in all, the data continues to back a robust labour market and accompanies the May JOLTS job openings came in at 9.824 mln vs. 9.9 mln expected and a revised 10.32 mln (was 10.1 mln) in April. Also,  Continuing claims came in at 1.72 mln vs. 1.737 mln expected and a revised 1.733 mln (was 1.742 mln) last week. This was the lowest since mid-February. The ADP reported its private sector jobs estimate at 497k vs. 240k expected and a revised 267k (was 278k) in May.

However, November Fed hike odds dropped to 39% from 45% after Nonfarm Payrolls.

Gold technical analysis

Nevertheless, from a daily perspective, the price is on the front side of the bearish trend and the data has done little to shift the bearish bias so far. Bears look for a break of $1,893 that guards a run to $1,824.25.