Gold (Xauusd) experienced selling pressure on Friday and hit a new daily low of $1,690.55 before moderately rebounding.
Following the positive US labour market data, the benchmark 10-year US Treasury bond yield has increased by more than 1% on the day, which has a negative impact on XAUUSD.
On a four-hour basis, gold prices are fluctuating around the 50% Fibonacci retracement (located from a high of $1,807.93 on August 10 to a low of $1,614.85 on September) at $1,711.60.
After feeling resistance at around $1,730.00, the precious metal has corrected to be close to the 20-period Exponential Moving Average (EMA) at about $1,709.00.
The Relative Strength Index (RSI) (14) has deviated from the bullish range of 60.00–80.00, indicating a slowdown in the upward trend.
In the early European session, the price of gold (XAU/USD) is fluctuating erratically in a constrained range between $1,709.35 and 1,713.42.
As attention has turned to the US Nonfarm Payrolls (NFP) statistics, the precious metal is doing poorly.
The yellow metal is striving to give an upward break as of this writing, but the yields are resisting the symptoms of an upward momentum loss, which might limit increases in gold prices.
The barrier of 3.83% has been retaken by the 10-year US Treasury rates.
The massive US NFP event will show to be a clear indication of the future course.
As expected, the US economy created 250k new employment in September. According to the US Automatic Figures Processing (ADP) Employment data released on Wednesday, payrolls increased by 208k.
This suggests that the US NFP announcement may be less than expected. The unemployment rate, meanwhile, remains held steady at 3.7%.
In the meantime, the US dollar index (DXY) is consistently failing to sustain above the key level of 112.20 despite skyrocketing hawkish expectations for a fourth consecutive 75 basis points (bps) rate hike by the Federal Reserve (Fed).
According to the CME Fed watch tool, the likelihood of a 75 bps rate increase being announced has risen beyond 73%.