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  • US Nonfarm Payrolls exceeded estimates of 200K, while the unemployment rate edged lower.
  • Average Hourly Earnings were lower than the 5% foreseen, signaling the absence of a wage spiral.
  • Gold Price Forecast: To find solid resistance around $1,852-$1,860.

Gold price extends its gains after the US Nonfarm Payrolls showed the US economy added more jobs than estimates while the rate of unemployed Americans edged lower. At the time of writing, XAU/USD trades volatile around the $1,837-$1,844 range.

The US Bureau of Labor Statistics revealed that December’s Nonfarm Payrolls rose by 223K above the 200K estimates, signaling the robustness of the labor market and justifying the need for further Federal Reserve (Fed) action. In the meantime, the Unemployment Rate tumbled to 3.5%, while Average Hourly Earnings dropped to 4.6% YoY, vs. estimates of 5%.

Meanwhile, the US Dollar Index is almost flat around 105.223, while the US 10-year Treasury bond yield is unchanged at 3.72%, a reason for Gold to continue extending its gains.

XAU/USD’s reaction

XAU/USD 1-hour chart broke higher on the release, towards $1,843.75, and quickly stabilized just shy of the daily pivot point at around $1,838.85. On the upside, XAU/USD was capped by the 50-EMA around $1,840, though it remains trading volatile as investors assess the overall US jobs market.

On the upside, the next resistance would be the R1 daily pivot point at around $1,852.67, followed by the January 5 daily high of $1,859.03. As an alternate scenario, the XAU/USD first support would be the pivot point around $1,838.85, followed by the 200-ENA at $1,828.68, followed by January’s 5 daily low of $1,825.04 and the S1 pivot level at $1,818.68.


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