Gold (XAU/USD) moves quietly on Friday after two straight days of gains, as traders appear reluctant to take fresh positions ahead of the US Nonfarm Payrolls (NFP) report at 12:30 GMT. The metal briefly climbed above $4,500 on Thursday, rising nearly 2% on the back of a softer US Dollar (USD), a modest pullback in Treasury yields and less hawkish remarks from Federal Reserve (Fed) Governor Christopher Waller. At the time of writing, XAU/USD trades around $4,472.
Technical Analysis
XAU/USD holds above the 100-day Simple Moving Average (SMA) at roughly $4,354 while remaining capped beneath the 200-day SMA near $4,534, leaving the broader tone neutral and consolidative.
Price has reclaimed the 38.2% Fibonacci retracement at about $4,448, turning it into immediate support, yet it has not challenged the 23.6% retracement at $4,544 overhead.
The Relative Strength Index (RSI) on the daily chart around 55 suggests mildly positive momentum, but the Moving Average Convergence Divergence (MACD) remains below zero, hinting that recovery attempts still face supply near the 200-day average.
On the downside, initial support is seen at the 38.2% Fibonacci level around $4,448, followed by the 50.0% retracement at $4,371 and the 100-day SMA near $4,354. A deeper slide would expose the 61.8% retracement at $4,293 and the lower Fibonacci steps at $4,183 and $4,042.
On the topside, bulls need to clear the 200-day SMA near $4,534, with the 23.6% retracement at $4,544 acting as a subsequent cap. A sustained break above these levels would open the path toward the prior swing high area around $4,700.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fundamental Analysis
Meanwhile, the US Dollar also steadies after losing about 0.55% on Thursday and slipping below 99.00 to its lowest level in more than a week. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.11.
The US economy is expected to add 56K jobs in August after shedding 23K in July, while the Unemployment Rate is forecast to hold at 4.1%. Markets will also closely watch wage growth and any revisions to the July payrolls figure, after May and June employment gains were revised down by a combined 103K in the previous report.
Fed Governor Waller said on Thursday he is “finally seeing some signs of disinflation,” adding that the “current rate setting could get us back to 2% inflation.” He also said the “rate decision in September hinges on August inflation” and that “if August inflation data comes in hot, I would consider a rate hike.”
His remarks prompted traders to pare back rate hike bets for the upcoming September 15-16 meeting. According to the CME FedWatch Tool, the odds of a 25-basis-point (bps) rate increase now stand at around 50%, down from roughly 63% before Waller spoke.
A stronger-than-expected NFP report could revive Fed rate hike bets and lift the US Dollar and Treasury yields, weighing on the non-yielding metal. Conversely, another weak payroll reading could strengthen the case for the Fed to keep rates unchanged, helping Gold reclaim the $4,500 mark.
Analysts at OCBC remain “constructive” on Gold, but caution that the near-term path is likely to stay “highly sensitive to Fed repricing.” They highlight that “payrolls tonight may drive the next move in yields and the USD,” while “next week’s CPI and PPI should be more decisive in determining whether the recent disinflation trend is sufficient to keep the Fed on hold.” OCBC experts also note that “geopolitical tensions remain supportive at the margin,” but warn that “higher oil prices are a two-sided risk if they feed back into inflation expectations and yields.”
XAU/USD Forecast Poll
1 Week
- 67%
- Bullish
- 33%
- Bearish
- 0%
- Sideways
1 Month
- 29%
- Bullish
- 57%
- Bearish
- 14%
- Sideways
1 Quarter
- 43%
- Bullish
- 43%
- Bearish
- 14%
- Sideways
Gold (XAU/USD)
In the Forex market, Gold functions as a currency. The particularity of Gold is that it is traded against the United States Dollar (USD), with the internationally accepted code for gold being XAU.
Known as a safe-haven asset, Gold is expected to appreciate in periods of market volatility and economic uncertainty. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn't rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. The United States is the country that holds the biggest resources of Gold in the world.
The XAU/USD pair tells the trader how many US Dollars are needed to purchase one troy ounce of Gold.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold prices escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher borrowing costs usually weigh on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars. A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Organizations that influence XAU/USD
- WGC (World Gold Council) is the market development organization for the Gold industry. Its aim is to stimulate and sustain demand for the precious metal.
- LBMA (London Bullion Market Association) is an organization whose members participate in this wholesale over-the-counter market for trading Gold and Silver. It is loosely overseen by the Bank of England. Most LBMA members are major international banks, bullion dealers, and refiners.
- COMEX (Commodity Exchange) is the primary market for trading metals. The COMEX merged with the New York Mercantile Exchange (NYMEX) in 1994 and joined the CME Group in 2008.
- CGSE (Chinese Gold and Silver Exchange Society) is an organization of Gold trading firms in Hong Kong that are participants of the Chinese Gold and Silver Exchange, the first exchange in Hong Kong.
- Central banks like the Federal Reserve (Fed), the European Central Bank (ECB) or the People's Bank of China (PBoC) significantly influence Gold prices through their monetary policies.
People that influence XAU/USD
- Neal Froneman, the World Gold Council's Chairman.
- Scott Bessent, the US Treasury Secretary.
- Xi Jinping, President of the People's Republic of China.
- The London Bullion Market Association members.
Circumstances that influence XAU/USD
The main variables traders should monitor to understand Gold's position are:
- Demand and supply: The balance between global Gold demand and its availability impacts its price.
- Economic uncertainty and currency devaluation: Gold is widely known as a safe-haven asset for investors in periods of economic uncertainty or when a currency faces devaluation.
- Practical applications: The use of Gold in technology innovations, jewelry manufacturing and other industrial applications.
Assets that influence XAU/USD
- Currencies: The US Dollar (USD) and the Euro (EUR) are the primary currencies influencing Gold prices. Other important currency pairs include EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD, and USD/CAD.
- Commodities: Silver and Gold are the most important precious metal commodities.
- Bonds: Influential fixed-income securities include the German Bund (a federal government-issued bond) and the US Treasury Note (T-Note).
- Indices: Key indices related to Gold and mining include the HUI (NYSE Arca Gold BUGS), the XAU (Philadelphia Gold and Silver Index) and the GDM (NYSE Arca Gold Miners Index).
- Exchanges: The most important stock exchanges for Gold are the New York Mercantile Exchange (COMEX), the Chicago Board of Trade, the Euronext/LIFFE, the London Bullion Market, the Tokyo Commodity Exchange, the Bolsa der Mercadorias e Futuros and the Korea Futures Exchange.