Gold price forecast: US NFP, clear break above $1,717

Gold price (XAU/USD) approaches $1,700 in Friday's Asian session, indicating a corrective pullback from the yearly low. Traders anticipate August's US Nonfarm Payrolls (NFP) and Unemployment Rate to determine gold's recovery.

XAU/USD pares recent losses at $1,698 and bounces off the lowest levels since July 21. Recent gains look to be pre-NFP market consolidation.

Hawkish Fedspeak and higher US data have weighed on XAU/USD values recently.

US ISM Manufacturing PMI for August was 52.8, compared to 52.0 expected. S&P Manufacturing PMI for August rose from 51.3 to 51.5, compared to 52.2 in July. US Initial Jobless Claims decreased to 232K from 248K and 237K. Unit Labor Cost grew 10.2% QoQ in Q2 versus 10.7% expected, while Labor Productivity fell 4.1% versus 4.5% expected and -4.6% before.

A covid-led lockdown in Chengdu, China, and a dismal Caixin Manufacturing PMI provide a bleak picture for the world's second-largest economy. Escalating geopolitical tension between Beijing and Washington via Taiwan might be similar.

Atlanta Fed President Raphael Bostic said inflation is 'far' from 2%. New Dallas Fed President Lory Logan said, "Restoring price stability is No. 1"

Wall Street closed neutral, but 10-year Treasury rates hit a high since late June. The 02-year rose to the 15-year top. CME's FedWatch Tool indicates 72% possibility of a rate hike in September, up from 69% earlier.

US Treasury rates and the US Dollar Index (DXY) fell from multi-year highs by press time.

US Nonfarm Payrolls (NFP) and Unemployment Rate for August are significant for gold dealers.