Gold Slips as Strong NFP Data Lowers Fed Rate Cut Hopes.
Gold prices slipped after U.S. Nonfarm Payrolls (NFP) data surpassed expectations, tempering hopes for imminent Federal Reserve rate cuts
FUNDAMENTAL OVERVIEW:
Gold (XAU/USD) retreated into a narrow consolidation range around $3,360 on Friday after the U.S. Nonfarm Payrolls (NFP) report indicated a stronger-than-expected labour market.
The U.S. economy added 139,000 jobs in May, surpassing forecasts of a 130,000 increase, while the unemployment rate held steady at 4.2%. The upbeat NFP data offered some support to the U.S. Dollar and briefly reduced expectations of an imminent Federal Reserve rate cut. Still, earlier signs of labour market softening leave room for a cautious policy outlook.
Following the report, the CME Fed Watch Tool showed July rate cut odds falling to 16.5% from 33.9%, suggesting the Fed may remain on hold for now.
Ongoing trade negotiations between the US and China are also weighing on gold prices, as markets remain focused on diplomatic developments. A positive phone call between President Donald Trump and President Xi Jinping on Thursday led to an agreement to resume high-level economic talks. While the discussions aim to resolve tariff disputes and strengthen ties, investor skepticism about meaningful progress persists. Additionally, lingering uncertainty surrounding US-Mexico trade tensions may keep market sentiment cautious, offering some support to gold.
Should trade conflicts escalate or talks stall, concerns over a potential economic slowdown and equity market weakness could boost demand for safe-haven assets like gold.
GOLD TECHNICAL ANALYSIS CHART:
Technical Overview:
Gold is trading within an up channel.
Gold is moving above 20& 50 Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying Zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 3389.00
Immediate support level: 3322.50
HOW TO TRADE GOLD
On the higher time frame, gold experienced a rejection after a sustained upward move, leading to a dip that briefly broke a key support zone. However, the breakdown was short-lived, and the price quickly reversed to the upside. Currently, gold has broken through its immediate resistance and is pulling back toward a nearby support zone. If this support holds and gold remains above it, the bullish momentum could resume, allowing for further upside movement.
