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Gold (XAUUSD) Price Forecast: Bulls Target Breakout Above $3,578.66 Ahead of NFP Report
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Key Points:
- Gold holds above $3,500.20 support, with traders watching $3,578.66 for a breakout that could fuel a rally to $3,879.64.
- Weaker U.S. labor data has boosted Fed rate cut bets, driving gold toward its best weekly gain in three months.
- A weak NFP report could push gold higher, lowering yields and the dollar while increasing demand for non-yielding bullion.
Gold Prices Eye Further Upside as Traders Await Key U.S. Jobs Data
Gold prices are edging higher in early Friday trade, attempting a rebound after Thursday’s sharp sell-off. Despite the pullback, the broader uptrend remains intact, with traders closely watching the $3,578.66 record high. A breakout above this level would confirm renewed buying momentum, opening the door to a potential test of $3,879.64 by September 17, based on current swing chart projections.
On the downside, immediate support rests at $3,500.20—previously a key breakout point. A sustained move below this level would indicate that the recent rally may have been driven more by short-covering than fresh buying, potentially triggering a retracement into the $3,445.11 to $3,413.59 support zone, where value buyers are likely to re-enter.
At 10:15 GMT, XAU/USD is trading $3551.11, up $5.24 or +0.15%.
Federal Reserve Rate Cut Bets Fuel Gold’s Weekly Surge
Gold is on track for its best weekly performance in three months, supported by rising speculation that the Federal Reserve is preparing to cut rates. A string of weaker-than-expected U.S. labor data, including soft ADP private payrolls and elevated jobless claims, has strengthened the market’s view that the Fed may cut rates by 25 basis points during its September policy meeting.
The U.S. non-farm payrolls report, due at 1230 GMT, is the next major catalyst. Markets are bracing for an August payrolls increase of just 75,000, slightly above July’s 73,000. A print below expectations would likely reinforce dovish Fed expectations and drive bond yields and the dollar lower—conditions that tend to benefit non-yielding assets like gold.
Technical Setup and Fed Commentary Support Bullish Gold Prices Forecast
Technically, the 50-day moving average at $3,370.40 remains a key trend support. As long as gold holds above this level, the broader uptrend remains intact. The market’s recent strength has been fueled by a confluence of lower funding costs, geopolitical risk premiums, a steepening yield curve, and a weaker U.S. dollar—tailwinds that continue to support bullish sentiment.
Fed officials this week emphasized concerns over the labor market, signaling growing support for rate cuts. With monetary policy shifting toward easing and risk appetite still fragile, gold continues to draw interest from both institutional and speculative buyers.
Gold Prices Forecast: Bullish Above $3,500, Eyes on NFP for Next Leg
As long as spot gold holds above $3,500.20, the near-term outlook remains bullish. A weaker-than-expected U.S. jobs report could provide the fuel needed for a fresh breakout above $3,578.66 and a potential rally toward $3,879.64 by September 23.
However, failure to defend the $3,500 support could expose the market to a corrective pullback into deeper retracement levels. Traders will take their cue from today’s labor data and its impact on Fed rate path expectations.
More Information in our Economic Calendar.
About the Author
James Hyerczykauthor
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.
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