• Gold price is marching towards the critical hurdle of $1,730.00 ahead of US NFP data.
• A marginal decline in odds for a 75 bps rate hike has supported the gold bulls.
• The Fed's long spell of rate hikes is responsible for lower US NFP projections.

Gold price (XAU/USD) has extended its gains above the immediate hurdle of $1,720.00 and is aiming to test a three-week high at around $1,730.00. The precious metal is scaling higher gradually as the US dollar index (DXY) has displayed a subdued performance. A rebound has been witnessed in the DXY after refreshing the day’s low around 110.80 but the soaring market mood will keep a lid over the DXY bulls.

The 10-year benchmark US Treasury yields have fallen below 3.75% amid a minor decline in bets for a 75 basis point (bps) interest rate hike by the Federal Reserve (Fed). Per the CME Fedwatch tool, the probability of 67.8% for a three-quarter-to-a-percent rate hike, recorded in early Tokyo, has slipped to 64.7% in the early European session.

Wednesday’s upbeat US ISM Non-Manufacturing PMI data and US Automatic Data Processing (ADP) Employment figures brought a significant rally in the DXY but have turned subdued ahead of US Nonfarm Payrolls (NFP) data. The payroll data is expected to decline to 250k vs. the former release of 315k. The spell of rate hikes by the Fed has forced the corporate to postpone their capacity expansion plans, resulting in weaker consensus for the labor additions data.

Gold technical analysis

On an hourly scale, gold prices are marching towards the 61.8% Fibonacci retracement (from August 10 high at $1,807.93 to September low at $1,614.85) at $1,734.58. The 200-period Exponential Moving Average (EMA) at $1,697.00 has tilted towards the north, which indicates more upside ahead.

Meanwhile, the Relative Strength Index (RSI) (14) has picked demand at 60.00, which indicates that the market participants have capitalized on the pullback move for creating longs.

Gold four-hour chart