Gold Holds Below $4,200 as Markets Await US Jobs Report

Key Moments

Gold Holds in Range Ahead of US Labor Market Data

Gold (XAU/USD) extended its range-bound price action on Friday, remaining below the $4,200 level heading into the European session as market participants looked to the upcoming US employment report. Expectations for the US Nonfarm Payrolls (NFP) release point to job creation of 90K in September, down from 162K previously. The Unemployment Rate is projected to stay at 4.1%.

In addition, the latest reading on annual wage growth, measured by Average Hourly Earnings, is set to provide further insight into the Federal Reserve’s potential policy path at a time when market pricing for an October rate increase has been easing. The data outcome is poised to influence the US Dollar and, in turn, shape near-term direction for the non-yielding precious metal.

Fed Outlook, Inflation Concerns, and Geopolitics Support the Dollar

A series of recent comments from influential Federal Open Market Committee (FOMC) officials signaled that policymakers do not currently see a pressing need for another immediate rate hike following the widely anticipated quarter-point move at the September meeting. At the same time, fresh survey data pointed to resilience in US manufacturing activity.

The Institute for Supply Management (ISM) reported on Thursday that US manufacturing activity expanded for a ninth consecutive month in September. The survey also showed that raw material prices rose for a 24th straight month. These cost pressures, combined with inflation concerns linked to volatile energy markets, continue to underpin expectations for further tightening by the Fed and have helped keep US bond yields close to multi-year highs, even after an overnight pullback.

Alongside monetary and inflation dynamics, geopolitical developments are also lending support to the US Dollar and weighing on gold. The ongoing US-Iran standoff remains a key backdrop for risk sentiment and currency flows.

Rising Geopolitical Tensions in the Persian Gulf

The Wall Street Journal reported that the Pentagon may soon deploy a third aircraft carrier strike group and 10,000 sailors and Marines to the Persian Gulf. Separately, Iran’s Persian Gulf Strait Authority (PGSA) stated that several tankers were attacked in the Strait of Hormuz in recent days.

Adding to the tension, US President Donald Trump said on Wednesday that he would decide very soon whether to blow up Iran and added that the war will end very soon one way or the other. These developments are keeping the geopolitical risk premium elevated and continue to favor US Dollar strength, creating an additional headwind for XAU/USD.

Given this backdrop, traders are cautious about calling a definitive bottom in gold. The metal would need sustained buying interest to confirm that a near-term floor is in place around the $4,100 area before investors could position with more confidence for a sustained move higher.

XAU/USD Technical Picture: Key Levels in Focus

On the 4-hour chart, XAU/USD maintains a bearish near-term profile while trading below the 200-period Simple Moving Average (SMA) and below mid-range Fibonacci retracement levels. The Moving Average Convergence Divergence (MACD) indicator remains in positive territory, with the MACD line above its signal line and a histogram that still appears constructive. At the same time, the Relative Strength Index (RSI) is hovering around 43, suggesting a potential pause in the downside move rather than a clear bullish reversal at this stage.

From a technical standpoint, any recovery above the $4,200 figure is likely to encounter immediate resistance around the 61.8% Fibonacci retracement at $4,230. The 50% retracement at $4,319 presents the next upside hurdle, followed by the 200-period SMA at $4,386 and the 38.2% level at $4,408. Together, these thresholds create a dense supply zone, with the 23.6% retracement at $4,519 acting as a more distant ceiling that would likely need to be cleared to materially challenge the current bearish bias.

On the downside, initial support sits at the 78.6% Fibonacci retracement level near $4,103, ahead of the previous swing low around $3,942. A break of these supports would risk reinforcing the prevailing negative tone for XAU/USD.