The price of gold (XAU/USD) appears to find support above the immediate level of $1,930.00. However, a downside bias is evident as the United States labor market data shows resilience beyond expectations. Stellar additions to private payrolls in July indicate the possibility of the Nonfarm Payrolls (NFP) report outperforming consensus estimates on Friday. Additionally, the Federal Reserve (Fed) policymakers may consider continuing the rate-tightening cycle during their September policy meeting.
The US Dollar Index’s strength, supported by a cautious market sentiment following the Fitch downgrade, adds further pressure on the gold price. Moreover, reports of weak gold demand from the World Gold Council (WGC) continue to exert consistent downward pressure on the precious metal. Investors are now keeping an eye on the ISM Services PMI data for additional guidance.
Currently, the gold price is consolidating within a narrow range above the crucial support level of $1,930.00. On Wednesday, the precious metal experienced selling pressure, slipping below the 20 and 50-day Exponential Moving Averages (EMAs). The yellow metal also confirmed a bearish reversal by breaking down the Head and Shoulders chart pattern. If the price decisively breaks below $1,930.00, it could expose the asset to the significant support level of $1,900.00.
