XAU/USD flattens near $2,650 as US NFP takes center stage

• Gold prices are moving sideways near $2,650 as investors await US NFP data for fresh interest rate forecasts.
• The Fed is expected to cut interest rates by 25 basis points at its policy meeting on December 18th.
• Gold prices have been hovering around $2,650 for almost a week.

Gold price (XAU/USD) is moving in a tight range around $2,650.00 in Thursday’s European session. The precious metal is struggling for direction as investors are sidelined ahead of the release of November’s United States (US) Nonfarm Payrolls (NFP) data, due out on Friday.

The labor market data will significantly influence market expectations for the Federal Reserve’s (Fed) likely interest rate decision at its monetary policy meeting on December 18. Financial market participants currently expect the Fed to cut interest rates by 25 basis points (bps). to 4.25% to 4.50%, according to the CME FedWatch tool.

Economists expect the US economy to have added 200,000 new workers, significantly more than 12,000 in October. The NFP report said payroll estimates in some industries were impacted by last month’s hurricanes. The unemployment rate is estimated to have risen to 4.2% from 4.1% in the previous release. Investors will also be keeping a close eye on U.S. average hourly wage data for clues on the current state of wage growth.

The downward trend in gold prices is expected to remain well supported amid tensions between Russia and Ukraine. Historically, the attractiveness of gold prices has increased amid rising geopolitical tensions.

Meanwhile, the US Dollar Index (DXY), which tracks the value of the greenback against six major currencies, fell to near 106.20. The 10-year U.S. Treasury yield rises to nearly 4.21%.

Gold technical analysis

Gold prices are moving back and forth near the uptrend line around $2,650, which is plotted from the February low of $1,984.00 on a daily time frame. The precious metal is hovering near the 20-day exponential moving average (EMA) around $2,650.00.

The 14-day Relative Strength Index (RSI) is fluctuating in the range of 40.00-60.00, indicating a sideways trend.

Looking to the downside, the November low of $2,536.87 will be key support for gold price bulls. On the downside, the October high of $2,790 will serve as key resistance.

Gold daily chart