Fundamental analysis of XAU/USD

XAU/USD prices are trading in a narrow range at 1936.00 ahead of important macroeconomic data on the US economy.
While the US dollar reached a four-week high and the yield on 10-year US Treasuries reached its highest level since November last year, XAU/USD is about to hit a three-week low. This situation makes gold more expensive for those who trade in other currencies and puts pressure on gold, which is fraught with the risk of breaking the support level of 1916.00. 
 
Against this background, the latest data on the U.S. economy showed an increase in private sector payrolls in July, indicating the stability of the labor market. At the same time, a slight increase in the number of unemployment claims in the U.S. further complicates the situation. Possible reaction of the Federal Reserve System to the employment report is the subject of much speculation. In addition, the key role in the dynamics of the metal was played by such factors as the Bank of England rate hike to a 15-year high and the downgrade of the U.S. credit rating by Fitch. The intervention of US politicians after Fitch downgraded the country's credit rating, ongoing tensions with China and concerns about China's economic growth further complicated the gold price picture. Instead of triggering a rise in gold prices, these events pushed investors to buy the US dollar, which reinforced the rise in Treasury bond yields.
 
In the short term, a bearish outlook for gold prevails due to the strong dollar, rising bond yields, potential Fed policy changes, and the market's attitude toward risky assets. However, once the rate hike is over, strong support could emerge at gold's lows. On a slightly positive note, the XAU/USD pair still maintains its current position and upside potential ahead of the release of non-farm payrolls data.
  
Looking ahead, investors should be wary of potentially weak US employment data as well as inflation figures next week to gauge the direction of the US economic recovery. Headline news from China and bond market movements are additional factors that require close monitoring to understand the future trajectory of the XAU/USD pair.
 
Technical Analysis and Scenarios:

Alligator Indicator: Indicates a downtrend as the jaw (blue line) is above the lips and teeth (green and red lines) - the trend is downward. Indicators AO and AC: Both are in the green zone, which is a confirming buy signal and indicates potential upward momentum.
Main scenario (SELL)
Recommended entry level: 1929.00.
Take Profit: 1916.00.
Stop loss: 1936.00.
Alternative scenario (BUY)
Recommended entry level: 1945.00.
Take Profit: 1955.80.
Stop loss: 1936.00.