Gold (XAU/USD) prices surrendered most of its intraday gains heading into the European session on Friday (February 7), although remained close to the record highs touched earlier this week. The US Dollar (USD) moved higher amid some repositioning trade ahead of the release of the US Nonfarm Payrolls (NFP) report, which in turn, was seen as a key factor acting as a headwind for the commodity.

That said, concerns over escalating US-China trade tensions and the economic impact of US President Donald Trump's trade policies might continue to act as a tailwind for the safe-haven Gold prices. Additionally, bets that the Federal Reserve (Fed) will stick to its easing bias and depressed US Treasury yields should help limit the downside for the non-yielding bullion.

From a technical perspective, the overnight bounce and subsequent up-move on Friday validate the near-term positive outlook for Gold prices. That said, the Relative Strength Index (RSI) is flashing slightly overbought conditions on the daily chart and warrants some caution for bullish traders. Hence, it would be prudent to wait for a near-term consolidation before positioning for an extension of the recent uptrend formed from the December monthly troughs.

In the meantime, the $2,855 horizontal zone, followed by the overnight swing low, around the $2,834 region, might provide some support to Gold prices ahead of the $2,815-2,714 region. This is closely followed by the $2,800 mark, which if broken decisively might prompt some technical selling and drag XAU/USD towards the $2,773-2,772 resistance breakout point. The latter coincides with the weekly low and a convincing break below it should pave the way for a deeper corrective slide.(Newsmaker23)

Source: FXstreet