Gold Tests $4,300 as US Employment Data and Fed Expectations Come into Focus
Gold extended its recent advance during Thursday’s Asian session, briefly testing $4,300 for the first time in seven weeks before trading near $4,274.80.
Lower oil prices eased near-term inflation concerns and reduced expectations of a September Federal Reserve rate increase. Markets priced the probability at around 55%, down from about 60% a day earlier, placing pressure on the US Dollar and supporting non-yielding gold.
Recent US data also fell short of expectations. ADP private-sector employment increased by 44,000 in July versus the 70,000 forecast, while the ISM Services PMI reached 54.1, below the expected 54.5. The FXS Fed Sentiment Index declined by 2.23 points to 138.69, indicating a modest reduction in perceived policy restrictiveness while remaining above 100.
Market attention now turns to Friday’s US Nonfarm Payrolls report for further signals on employment conditions and the Federal Reserve policy outlook.
Technically, gold remains above its 21-day Simple Moving Average at $4,078.38 and its 50-day average at $4,157.48. The 14-day Relative Strength Index stands at 61.94, reflecting positive momentum while approaching overbought conditions.
Key upper references include $4,350, the 100-day average near $4,393.96 and the 200-day average near $4,493.07. On the lower side, $4,275 is the nearest reference, followed by $4,157 and $4,078.
TD Securities noted that discretionary macro funds have more than doubled their gold positions since June, while systematic participation has also increased. This reflects institutional positioning rather than a guaranteed future price outcome.
Markets will continue to monitor US Nonfarm Payrolls, the US Dollar, oil prices and Federal Reserve expectations, which may influence near-term XAU/USD volatility.
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