Gold prices moved up and down today against greenback and prices have consolidated within a range this week. The yellow metal has been sidelined as energy commodities roared and inflation fears fueled the US Dollar higher.  Today it was stuck in a narrow range, as investors sought more direction from the U.S. non-farm payrolls report, considered key to the U.S. Federal Reserve’s stimulus taper schedule. Investors expect the central bank to begin reducing its bond purchases by the end of 2021, and have begun to set prices on the potential for a rate hike in 2022. The prospects for an early policy tightening by the Fed should act as a headwind for the non-yielding yellow metal.

According to a Reuters survey of economists, non-farm payrolls earners are expected to raise 500,000 jobs in September. Federal Reserve Chairman Jerome Powell signaled last month that there would be broad agreement among policymakers to reduce the central bank’s monthly asset purchases in November, until the September work report is “decent”. Reduced stimulus and higher interest rates boost bond yields, which translates into higher chance costs of holding interest-free gold.

Gold and energy products dominate the market focus because supply barriers have not been able to sustain demand in the Northern Hemisphere during the winter. The skyrocketing prices seen in this sector spread to some commodities outside of energy, but not so much for gold at this time. The dollar, which normally moves against gold, rose on Friday but was below a one-year high. The Federal Reserve’s potential plan to reduce its monthly bond purchases by the end of the year continues to weigh on the gold market as prices support about $ 1,750 an ounce. However investment firm raises the price of gold by thousands of dollars in the long-term.

On the other hand yesterday new jobless claims data showed the number of Americans filing new claims for jobless benefits dropped by the most in three months last week, suggesting the labour market recovery was regaining momentum after a recent slowdown. US number of initial jobless claims filed during the past week also dropped to 326,000, the most in three months, and indicated further recovery in the country’s job market. Meanwhile, the U.S. Senate on Thursday approved legislation to temporarily raise the federal government’s $28.4 trillion debt limit and avoid the risk of default within the month. It will put off a longer-term solution until early December 2021.

While considering major economic data, U.S. initial unemployment claims fell to 326K from 348K, forecast by analysts meanwhile the BLS will release today non-farm payrolls for September. Investors expect to create at least 488K new jobs in the economy and the Federal Reserve bond taper announcement better than estimate may open the door for yellow metal.

XAU/USD 4 Hour Chart:

Support: 1749.2 (S1), 1743.0 (S2), 1734.1 (S3).

Resistance: 1764.3 (R1), 1773.2 (R2), 1779.4 (R3).

All the above catalysts shows the non predictable moment for Bullion and investors are waiting for non-farm payrolls for September. We expect a mid-trend for XAU/USD.