Gold price forecast: XAU/USD falls from $1,780, but more gains are likely on a weaker dollar

The gold price is testing the resistance zone of $1,764.45 and $1,773.35. The ISM New Orders Index measures future demand for U.S. manufacturers and indicates a drop in the index may signal a drop in demand. As a result, analysts anticipate a decline in US nonfarm payrolls, from 372k to 250k.

The price of gold (XAU/USD) has dropped from its morning high in Tokyo of $1,780.58 to its current level of around $1,774.65. When the precious metal makes a strong upward break of consolidation and then tests the breakout at low volume, it’s likely to make another strong upward move. An earlier consolidation between $1,764.45 and $1,773.35 was broken out of by the precious metal, and it has been trending upwards ever then.

After starting at a three-week low of 105.05 points, the US dollar index (DXY) has witnessed a slight rebound. Since retailers and manufacturers have sharply lowered their forward demand, the DXY has taken on a pessimistic tone. The Institute for Supply Management (ISM) Manufacturing New Orders Index for the United States came in below expectations on Monday.

Consumer and producer demand may be anticipated with the use of economic data. Numbers came in at 48, below expectations of 52 and the prior figure of 49.2. When the DXY fell precipitously, it was because of a steep drop in the demand forecast index.

The markets will remain fixated on Friday’s release of the US Nonfarm Payrolls (NFP) data. The market expects the US economy to add 250,000 jobs in July, down from June’s 372k gain. The value of gold as measured against the dollar will rise as a result of this.

Gold prices on an hourly basis have formed a rising channel, which is indicative of a continuing upward trend. The peak point of the pattern, $1,739.37, is based on the high of July 22, while the low point, $1,681.87, is based on the low of July 21.

Both the 50-day and 200-day exponential moving averages (EMAs) are trending upwards, now sitting at $1,765.40 and $1,742.85, respectively. Meanwhile, the Relative Strength Index (14) is trying to go back to a level of 60.00. In the case of a similar occurrence, a fresh wave of bullish impetus will be required.

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