Gold Holds Near Weekly Peak Ahead of US Jobs Data

Key Moments

Gold Softens but Remains Firm Ahead of NFP

Gold (XAU/USD) trades slightly lower on Friday, ending a two-session advance as the U.S. Dollar (USD) edges higher. Despite the mild pullback, the metal continues to trade above $4,450 and stays close to the weekly high reached on Thursday as market participants position for the latest U.S. monthly employment report.

The upcoming U.S. Nonfarm Payrolls (NFP) figures are expected to offer fresh direction on the Federal Reserve’s policy outlook at a time when expectations for a rate increase in September have diminished. The data are set to be a key driver for USD price action and could determine the next leg for the non-yielding metal.

Fed Rhetoric, Inflation Risks, and Dollar Moves

TD Securities highlighted the importance of the labor data for the precious metals space, noting that, “Non-farm payrolls this Friday will be the next piece of data with keen interest for precious metals” as markets navigate “the renewed hawkish tone from the Fed and the latest escalation in the energy market.” The firm also expressed a more positive medium-term stance, saying, “looking forward, we do not anticipate material downside as the landscape for precious metals has improved amid a renewed dollar debasement theme, while Fed hikes remain far from certain.”

In the run-up to the report, Federal Reserve Governor Christopher Waller commented on Thursday that he is inclined to support unchanged interest rates at the September FOMC gathering, assuming there are no surprises in forthcoming inflation readings. Those remarks prompted a sharp drop in U.S. bond yields and the USD, allowing gold to extend its rebound from a four-week low printed on Wednesday.

However, inflation concerns linked to elevated energy prices keep open the possibility of another rate hike later in the month. That backdrop has helped the U.S. Dollar Index (DXY) recover from a one-and-a-half-week trough, curbing further immediate gains in bullion.

Geopolitical Tensions Support Oil and Safe-Haven Demand

Crude oil prices are trading close to their highest levels since July 24 as renewed tensions between the U.S. and Iran and clashes around the Strait of Hormuz fuel supply concerns. In a further escalation of the Middle East backdrop, Iran targeted U.S. military installations in Kuwait and the United Arab Emirates (UAE) on Thursday.

On the U.S. political front, Vice President JD Vance stated that President Donald Trump has multiple tools to respond to Tehran, including economic, military, diplomatic, and covert options. Separately, South Korea is reportedly preparing to send military assets to help safeguard freedom of navigation through the Strait of Hormuz, with deployment aimed before year-end.

These developments help sustain a geopolitical risk premium in energy markets, underpinning crude prices and potentially supporting safe-haven demand for the USD. Even so, the near-term trajectory for gold remains tightly bound to how markets interpret the upcoming U.S. jobs release.

Price Levels and Near-Term Outlook for XAU/USD

XAU/USD appears to have found a floor after its recent corrective slide from around $4,700, which marked the highest level since May 14. The metal is still on pace to record modest weekly gains. For a more decisive bullish extension, traders are looking for a sustained break and acceptance above the $4,500 psychological area.

Technical Setup: Key Support and Resistance Zones

On the 4-hour chart, gold continues to trade with a constructive short-term bias, holding above the 200-period Simple Moving Average (SMA) and the 38.2% Fibonacci retracement of the latest downswing. Momentum indicators are supportive without showing signs of extreme conditions: the Relative Strength Index (RSI) sits near 56, while the Moving Average Convergence Divergence (MACD) line is above zero with a positive histogram. Price action is pressing into the 50% retracement barrier just below $4,500.