Fundamental analysis of XAU/USD

On Friday morning, gold is at around 1943.10 and is expected to continue its upward movement. At the same time, U.S. gold futures are trending higher and have reached 1970.00. One of the factors behind gold's impressive performance this week is the fact that the probability of a US interest rate hike this year is decreasing. The financial community is also waiting for the US payrolls report and non-farm payrolls data.
The overall assessment of the US economy this week indicates limited activity. Notable economic data include the lowest number of open job openings in two and a half years in July and economic growth in the second quarter that was significantly lower than previously expected. These indicators, combined with a weaker U.S. dollar and bond yields, which are expected to fall about 3% this week, mainly due to lower inflation, are boosting gold's attractiveness as an investment. However, the expected non-farm payrolls report could be groundbreaking. A worse-than-expected job creation report could push gold prices even higher. Conversely, positive news could slow the rise in gold prices. 
This week's economic data, combined with the decreasing likelihood of the Federal Reserve raising short-term interest rates, bodes well for a brighter future for gold prices. However, the release of the Non-Farm Payrolls report is very important and could affect the direction of movement. The decline in the XAU/USD price ahead of the Non-Farm Payrolls data reflects market uncertainty about the upcoming Fed decisions, especially in light of the recent weak US economic data. The numbers are not very supportive of activists calling for a change in policy. Globally, economic recovery efforts in China, one of the major players in the XAU/USD market, are providing indirect support to gold prices. Major measures include the People's Bank of China reducing the foreign exchange reserve ratio and lowering the interest rate on Chinese banks' yuan deposits. 
Opinion on the possibility of an end to rate hikes is reinforced largely due to the recent slowdown in inflation in major economies, which strengthens the position of gold lovers. Finally, upcoming US economic data including non-farm payrolls, unemployment rate and average hourly earnings for August are likely to play an important role in determining the trajectory of gold prices.
  
Technical Analysis and Scenarios:

The Alligator indicator is hungry and signaling that the instrument is in an uptrend. The jaw (blue line) is well below the lips and teeth (green and red lines), further emphasizing the upward momentum. Both oscillators are in the gray zone, showing divergence. This divergence indicates uncertainty in the market and is not a reliable signal to open a position. Given the hungry state of the "alligator", we can expect the pair XAU/USD to continue the uptrend.
Main scenario (BUY)
Recommended entry level: 1950.00.
Take Profit: 1960.00.
Stop Loss: 1945.00.
 
Alternative scenario (SELL)
Recommended entry level: 1938.00.
Take Profit: 1931.00.
Stop loss: 1945.00.