• Gold price struggles to capitalize on its modest intraday uptick to the $1,945 area on Friday.
• Bets for one more rate hike by the Federal Reserve continue to act as a headwind for the metal.
• Investors now await the release of the US NFP report before placing fresh directional bets.

Gold price attracts fresh sellers following an Asian session uptick to the $1,944 region on Friday and hits a fresh daily low in the last hour, albeit lacks follow-through. The XAU/USD currently trades just below the $1,940 level, nearly unchanged for the day, as traders keenly await the closely-watched monthly employment details from the United States (US) before placing fresh directional bets.

The popularly known Non-Farm Payrolls (NFP) report is due for release later during the early North American session and will influence expectations about the Federal Reserve’s (Fed) next policy move. This, in turn, will determine the near-term trajectory for the US Dollar (USD) and provide some meaningful impetus to the Gold price. In the meantime, the uncertainty over the Fed’s future rate-hike path fails to assist the USD to capitalize on the overnight rebound from a two-week low and acts as a tailwind for the US Dollar-denominated commodity.

It is worth recalling that the US macro data released earlier this week – the ADP report and the second estimate of the US Q2 GDP print – indicated the resilient US economy might be starting to lose steam. This, in turn, fueled speculations that the Fed might be forced to soften its hawkish stance sooner rather than later. That said, the US Personal Consumption Expenditures (PCE) Price Index on Thursday keeps the door open for one more 25 bps lift-off in 2023 and triggers an intraday USD short-covering move from the 200-day Simple Moving Average (SMA).

Meanwhile, the view that the Fed will keep interest rates higher for longer helps the US Treasury bond yields to stall the recent pullback from a multi-year peak. This, along with a generally positive tone around the US equity futures, further contributes to capping the upside for the non-yielding Gold price ahead of the key US data risk. Hence, it will be prudent to wait for strong follow-through buying before positioning for an extension of the recent strong recovery from the $1,885 region, or the lowest level since March 13 touched earlier this month.

Technical levels to watch

XAU/USD