Gold prices have been stable, sitting at the higher end of their weekly range while traders wait for the US Nonfarm Payrolls (NFP) report. This report is vital as it shapes expectations about the Federal Reserve’s decisions on interest rates, which, in turn, affects the demand for the US Dollar and gold prices. Market sentiment suggests that the Federal Reserve might start cutting rates soon, which limits the strength of the US Dollar. Uncertainties around trade continue, even with new agreements, especially between the US and Vietnam, and ongoing talks to reduce tariffs between the US and India. These factors help support gold prices.

US Private Payrolls Data

Recent data on US private payrolls showed a loss of 33,000 jobs in June, marking the first decline in over two years. This has strengthened expectations for rate cuts by the Federal Reserve. Traders are now considering a 25% chance of a rate cut in the July meeting, with additional cuts likely by the end of the year. Technically, gold’s recent rise above the 200-hour Simple Moving Average indicates a bullish trend. The immediate resistance for gold is around $3,363-$3,365, with a potential target of $3,400 if that level is crossed. Support is found near $3,329-$3,330. The NFP report is particularly important because of its volatility and its impact on the US Dollar. Gold prices are currently near their recent highs primarily because investors are anxiously awaiting the Nonfarm Payrolls report. This report isn’t just about the US economy; it directly affects how the Federal Reserve will adjust interest rates. When the Fed changes rates, it causes the Dollar to react—often gaining strength with rate hikes and losing strength with cuts. Since gold is priced in Dollars, it often moves in the opposite direction. In simpler terms, weaker labor data signals slowing economic growth. This is what the market is using to anticipate rate cuts. The drop in private payroll numbers by over 30,000 last month was the first contraction we’ve seen in over two years, which helps explain why traders are leaning towards expecting the Fed to ease policy as soon as July.

Powell and Fed Implications

Powell and his team have suggested they want to see more than one weak report. However, consecutive weak indicators can build a stronger argument than just a single data point. As a result, the chance of a rate cut at this month’s meeting is around 25%, with another cut becoming increasingly likely before the end of the year. Although this number is relatively low, it shows how quickly expectations can change. If this Friday’s report is worse than predicted, those odds could quickly double. On the technical side, strong support is seen near $3,330, while selling pressure appears just above $3,360. This upper zone has held for several sessions, so any clear breakthrough could be significant. If a dovish signal comes from the jobs report, we could see gold test the $3,400 level, which would prompt long positions to consider reducing their exposure. So far, support at $3,329 has held, but if gold drops below this, it could undermine the recent bullish trend and prompt a reassessment of market sentiment. Ongoing tariff discussions—especially between the US and India, as well as expanding trade ties with Vietnam—affect the strength of the Dollar. While these agreements don’t change the Federal Reserve’s policies directly, they contribute to the larger view that global trade issues are still unresolved. Uncertainty in trade often drives demand for safe-haven assets like gold. While these matters aren’t the main focus, they help sustain support for precious metals by keeping systemic risks present. We believe that price levels will be especially important in the next ten days. A rise through resistance while the NFP report surprises to the downside could support a long bias for the week. Conversely, if employment data is unexpectedly strong or wage growth accelerates, the narrative for lower rates could quickly disappear. This might cause gold to stall at higher resistance levels and attract Dollar buyers, forcing gold traders to reassess their positions. The US Dollar and yields remain largely range-bound leading up to the report, so setups that rely on clear confirmations from macro data should wait for increased clarity. This is not the time for assumption-based adjustments. A combination of chart structure and defined macro inputs will offer better opportunities compared to guessing Fed pivots. For now, prices are stuck in uncertain flows, awaiting a catalyst, and the next 24 hours could provide that. Create your live VT Markets account and start trading now.

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