Gold prices are steady during the European session but remain below recent highs. The US Dollar faces challenges due to concerns about US fiscal policy and ongoing trade uncertainties, increasing gold’s appeal as a safe haven. A strong US jobs report has lowered expectations for a Federal Reserve interest rate cut, which supports the dollar but hasn’t stopped gold’s upward trend. Despite positive market sentiment, gold is trying to break a two-week losing streak, with expectations for further price increases.

US Labor Market Data

In June, US nonfarm payrolls rose by 147,000, surpassing expectations. The unemployment rate fell to 4.1%, which reduces the likelihood of an immediate Fed rate cut. Although wage growth slowed, easing inflation fears, there’s still potential for two 25 basis point rate cuts later this year. President Trump’s tax bill could add $3.4 trillion to the US debt, putting pressure on the dollar but supporting gold. Trade tensions also bolster gold prices as Trump plans to inform partners about tariff changes. US markets are closed for Independence Day, impacting XAU/USD liquidity. Technically, gold’s upward movement faces resistance around $3,352-$3,355 and $3,365-$3,366, with potential to reach $3,400. Support is found at $3,326-$3,325 and $3,300, where a break could favor bearish trends. Currently, gold remains stable during European trading hours but hasn’t surpassed the peak from earlier in the week. This peak is just out of reach for now. Ongoing pressure on the dollar is accompanied by uncertainties regarding US fiscal policies. This situation, along with concerns about trade changes, enhances gold’s position as a safe asset.

Market Dynamics and Technical Analysis

Recent labor data from the US adds clarity to the market. Payrolls rose by 147,000—more than expected—while the unemployment rate unexpectedly dropped to 4.1%. This should have supported the dollar further, but sluggish wage growth lowered inflation expectations, sparking discussions of possible policy easing later in the year. Markets are now anticipating one or two quarter-point rate cuts, likely not before September. Additionally, the fiscal situation is concerning. The former president’s tax reform may inflate public debt by over $3 trillion. This level of debt negatively impacts dollar confidence, even if it isn’t immediately reflected in prices. Plans for potential tariffs further complicate the picture, strengthening the case for gold bulls. This week, liquidity is lower due to US markets being closed for Independence Day. Reduced trading volumes often lead to more volatile price changes, especially for gold, which can react strongly to even small news events. A clear technical pattern is emerging. Resistance levels are at $3,352–$3,355 and $3,365–$3,366. If prices surpass these levels, momentum could push towards $3,400. Conversely, if prices drop, attention will shift to the support zone between $3,326 and $3,325. Breaking below $3,300 could lead to a longer period of weakness and bearish positioning for the first time in weeks. In the coming sessions, our focus will be on trigger levels rather than overall direction, which remains cautiously positive. If prices can close above resistance, we might see a wave of stop losses triggered, fueling upward movement. On the other hand, failing to maintain support would indicate exhaustion among buyers. For traders using leverage, closely monitoring economic calendars and interest rate changes is becoming increasingly important. Sharp price swings are reacting to minor adjustments in policy language or unexpected data, so stop-loss levels may need frequent adjustments as trading patterns indicate. In these changing conditions, adaptation is essential. Create your live VT Markets account and start trading now.

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