Gold prices holds a firm tone around the $3,250 zone pertroy ounce on Friday, supported by marked Dollar weakness following April’s US jobs report, even as Treasury yields staging a broad-based rebound.
Gold price clings to the critical 21-day Simple Moving Average (SMA) support, now at $3,234, pausing the correction accentuated by the downside break of a three-week-long rising channel on Wednesday.
The 14-day Relative Strength Index (RSI) sits just above the midline near 52.50, having ended its descent.
Therefore, a rebound toward the immediate static support-turned-resistance at $3,260 could be seen if the 21-day SMA holds on a weak US NFP report.
Acceptance above that level will prompt Gold buyers to flex their muscles toward the channel support (now resistance) at $3,405.
Ahead of that, the $3,350 could be a tough nut to crack.
If the US jobs data exceeds expectations by a wide margin, Gold sellers crack the 21-day SMA at $3,234 on a sustained basis, opening doors toward the $3,150 psychological level.
The 50-day SMA at $3,087 will be next on their radars.
Fundamental Overview
A combination of factors holds back traders from placing aggressive bullish bets and caps the upside for the precious metal.
Investors remain hopeful about the potential de-escalation of trade tensions between the US and China – the world’s two largest economies. This remains supportive of a generally positive risk tone and could undermine the safe-haven Gold price. Traders might also opt to wait for the release of the US Nonfarm Payrolls (NFP) report. The crucial US jobs data might provide fresh cues about the Federal Reserve’s (Fed) policy outlook, which, in turn, should influence the USD and drive the non-yielding yellow metal.
Gold price struggles to capitalize on intraday uptick amid positive risk tone as traders await US NFP report
China’s Commerce Ministry said on Friday that the US has recently, through relevant channels, actively conveyed messages to engage in talks on tariff issues and the country is assessing the proposal to start negotiations. This adds to the optimism over a possible easing of the tit-for-tat tariff war between the world’s two largest economies.
Moreover, hopes for tariff deals between the US and its trading partners lifted the US Dollar to a three-week high and dragged the Gold price to the $3,200 neighborhood on Thursday. The USD bulls, however, turn cautious amid bets for more aggressive policy easing by the Federal Reserve and ahead of the US Nonfarm Payrolls report.
Traders ramped up their bets that the US central bank will deliver four quarter-point rate reductions by the year-end after data released this week showed that the US economy unexpectedly contracted for the first time since 2022. Moreover, the Personal Consumption and Expenditure (PCE) Price Index pointed to signs of easing inflation.
Adding to this, the US ADP report on private-sector employment suggested that the US labor market is cooling. Furthermore, the US Department of Labor reported on Thursday that initial jobless claims increased from 223,000 to 241,000 in the week ended April 26 – marking the highest level since February.
Meanwhile, the US ISM Manufacturing PMI remained firmly in contraction territory for the second straight month, though it fell less than expected, from 49.0 to 48.7 in April. Traders now look forward to the release of the US monthly employment details for fresh cues about the Fed’s policy outlook.
The popularly known US Nonfarm Payrolls (NFP) report is expected to show that the economy added 130K new jobs in April, sharply lower than 228K in the previous month. The Unemployment Rate, however, is expected to hold steady at 4.2%, while Average Hourly Earnings might have risen by 0.3%.