Gold Price Forecast: XAU/USD steadies, US employment data disappoints, Trump’s tax bill in focus
Gold (XAU/USD) price is attempting to extend its recovery as traders digest Wednesday’s Automatic Data Processing (ADP) employment report.
With XAU/USD hovering near $3,350 at the time of writing, US President Trump's tax bill and interest rate expectations continue to drive demand for bullion.
TheADPEmployment Change report for June showed that the private sector contracted in June.
Analysts had expected the June report to show that 95,000 jobs were added to the US private sector in May. Instead, a negative reading of 33K reflects potential weakness in the US labour market.
As a closely watched precursor to theNonfarm Payrolls(NFP) report, the soft print has provided additional support for Gold.
As the Fed remains committed to monitoring the incoming employment and inflation data before reducing interest rates, this job report may influence the potential trajectory for interest rates.
On Tuesday, Fed ChairJerome Powellstated atthe European Central Bank (ECB)Forum on Central Banking in Sintra that "It's going to depend on the data, and we are going meeting by meeting." "I wouldn't take any meeting off the table or put it directly on the table. It's going to depend on how the data evolves,” Powell added.
These comments suggest that the Fed is not rushing to cut rates, increasing the potential for a September interest rate cut.
Gold daily digest market movers: XAU/USD trades steady as the House of Representatives votes on Trump’s tax bill
Gold technical analysis: XAU/USD clings to the 20-day SMA
Gold is trading near the $3,350 psychological level, aligning with the 20-day Simple Moving Average (SMA).
The 23.6% Fibonacci retracement level of the April low to the April high move provides resistance at $3,371. A move higher and a break of wedge resistance could push XAU/USD to the $3,400 psychological level, opening the door for the June high of $3,452.
Gold (XAU/USD) daily chart
The Relative Strength Index (RSI) is nearing 52 at the time of writing, suggesting that momentum remains close to neutral levels.
On the downside, the 50-day SMA provides near-term support at $3,321. Below that is the round number of $3,300 and the 50%Fibonacciretracement of the April move at $3,229.
A move below could bring the May low of $3,120 mark into play.
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