Gold Price Forecast: XAU/USD remains sideways around $4,050 during US NFP week

Gold (XAU/USD) hovers around $4,050 during the European trading session on Tuesday, as investors eagerly await the U.S. Nonfarm Payrolls (NFP) report for July. Economists at Deutsche Bank anticipate a modest increase in employment, with the report showing "employment growth of +65k, modestly above June’s +57k reading." They also predict that the U.S. Unemployment Rate will stay at 4.2%, though there is a chance it could rise to 4.3% if labor force participation rebounds after a sharp decline last month.

Pay and hours are expected to show a slight increase, with average hourly earnings up by 0.3% month-over-month and average hours worked at 34.3 hours. Investors will be watching this data closely, as it will impact market expectations for the Federal Reserve's monetary policy outlook. According to the CME FedWatch tool, there is a 63.6% chance of a rate hike in the September policy meeting, which could negatively affect non-yielding assets like Gold.

In Tuesday's session, traders will focus on the U.S. JOLTS Job Openings data for June, which will be released at 14:00 GMT. Danske Bank analysts emphasize that job openings have risen moderately this year, historically predicting rising wage pressures ahead. This supports their view that strengthening U.S. labor demand could lead to renewed upward pressure on wages as the cycle progresses.

Gold is currently trading flat at around $4,050.80, below the 20-day Exponential Moving Average ($4,072.96), indicating bearish near-term bias and capped by immediate overhead supply. The Relative Strength Index (14) is within the 40.00-60.00 range, suggesting consolidative price action rather than a decisive recovery. The next resistance level lies at the 20-day EMA ($4,072.96); a daily close above this barrier would reduce downside pressure and allow for a stronger corrective bounce towards the July 22 high of around $4,166.

Conversely, last week's low of $3,996.13 could act as immediate support, followed by the June 30 low at $3,941.76.