The price of gold fell slightly after surprising job growth in the US in June, but the losses were minimal. Although the report shows some weaknesses, most of the job growth happened in the public sector. The drop in the unemployment rate looked good for the US Federal Reserve, suggesting that interest rate cuts might be delayed. This creates temporary pressure on gold prices.

Current Support for Gold

Despite this, the main support for gold comes from US policies that shake confidence, not from interest rate expectations. Unless there is a significant policy change, the recent decline in gold prices may only be temporary. We have seen that the gold price movement after the US employment data should not be viewed as a long-term trend. The bigger picture involves more than just the headline numbers. Temporary pressure came from a slightly lower unemployment rate and strong job growth in the public sector, making immediate interest rate cuts less likely. However, job growth in the private sector has slowed down, which does not indicate a booming economy. Here’s what’s important: the market reacted to the nonfarm payroll results by lowering expectations for quick interest rate cuts in the US. This has heightened the focus on short-term price changes. When we analyze the numbers, we see that most job growth came from government positions, which doesn’t necessarily indicate strong overall economic growth. What consistently supports gold prices is confidence—specifically, a lack of confidence in broader economic policies. When central banks leave questions unanswered, especially in the medium term, gold tends to regain its strength. In this case, it’s not just about inflation or interest rates; it’s about trust or the absence of it.

Market Reactions and Interpretations

Recently, Powell’s comments had a neutral tone, leading the markets to adopt a wait-and-see approach. There was no clear sign of a policy change. For traders, this means uncertainty likely will continue until the next major economic reports come out. Upcoming statements from key Fed members during this period might add to the market’s fluctuations, as they probably won’t be saying the same thing. From a market positioning standpoint, short-term exposure has decreased, indicating that some traders misjudged the situation. Futures data shows a slight drop in net long positions after the report. The mild sell-off suggests that some support remains in place. Over the next two weeks, we should watch how the two-year Treasury responds to US CPI and PPI data. If yields decrease despite neutral Fed comments, gold may rise, even without new supportive language from the Fed. This would indicate that the market is pricing in fears of a downturn, regardless of the Fed’s actions. At the same time, technical levels remain important. Staying above the slowly rising 50-day moving average shows that buyers are still active. If prices dip below this level, further selling could occur, but absent that situation, physical demand, especially from Asia, may quietly increase. What we have learned is that market trust in monetary policies is fragile. Any unexpected geopolitical or policy news could quickly change prices. Gold serves as a measure of this unease more than anything else. In the next two weeks, every policy statement will hold more significance for what it reveals about coordination—or lack thereof—rather than providing direct predictions. That’s where traders will either succeed or fail. Create your live VT Markets account and start trading now.

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