Gold Buyers Hesitate Below $4,500 as Modest US Dollar Rebound Caps Gains Ahead of NFP
Gold prices remained defensive below the key $4,500 level during Friday’s Asian session, pausing a two-day rally as the U.S. Dollar staged a modest recovery. Despite the pullback, the precious metal continued to trade near its weekly high reached in the previous session, with investors closely watching the upcoming U.S. Nonfarm Payrolls (NFP) report for fresh clues on the Federal Reserve’s policy outlook.
The highly anticipated U.S. employment data is expected to play a crucial role in shaping market expectations for the Fed’s September meeting, especially as speculation surrounding another interest-rate hike continues to fade.
Gold Technical Outlook Remains Constructive Above Key Support Levels
From a technical perspective, gold maintains a bullish short-term bias, holding above the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibonacci retracement level of its recent decline.
Momentum indicators continue to favor the upside. The Relative Strength Index (RSI) is hovering near 56, while the Moving Average Convergence Divergence (MACD) remains above the zero line with a positive histogram, signaling healthy bullish momentum without entering overbought territory.
Gold is currently testing the important 50% Fibonacci retracement barrier near $4,500. A decisive breakout above this level could pave the way toward the 61.8% retracement at around $4,540. Further resistance is located near the 78.6% retracement level at $4,609, followed by a major swing-high cluster around $4,698.
On the downside, initial support is seen near the 38.2% retracement level at $4,442. Additional support lies around $4,381 at the 23.6% retracement level, while the 200-period SMA at $4,322 and the structural low near $4,283 continue to reinforce the broader bullish outlook.
Traders Await US Jobs Data as Fed Tone Turns More Hawkish
According to analysts at TD Securities, Friday’s Nonfarm Payrolls report is the next major catalyst for precious metals markets as investors navigate renewed hawkish signals from the Federal Reserve and ongoing volatility in energy markets.
The bank noted that while short-term risks remain tied to incoming economic data, the broader outlook for precious metals has improved due to expectations of a weaker U.S. dollar and uncertainty surrounding further Fed tightening.
Ahead of the jobs report, Federal Reserve Governor Christopher Waller stated on Thursday that he would favor keeping interest rates unchanged at the September FOMC meeting, provided upcoming inflation data does not deliver an upside surprise.
His comments triggered a sharp decline in both U.S. Treasury yields and the U.S. Dollar, helping gold recover from its four-week low recorded on Wednesday. However, rising energy prices continue to pose inflation risks that could still support the case for another rate hike later this month.
As a result, the U.S. Dollar Index (DXY) rebounded from a one-and-a-half-week low, limiting further gains in gold prices.
Middle East Tensions Keep Safe-Haven Demand Alive
Crude oil prices remain near their highest levels since July 24 amid renewed tensions between the United States and Iran, as well as ongoing clashes around the Strait of Hormuz.
Geopolitical concerns intensified after reports that Iran targeted U.S. military bases in Kuwait and the United Arab Emirates on Thursday. Meanwhile, U.S. Vice President JD Vance stated that President Donald Trump retains several options for dealing with Tehran, including economic, military, diplomatic, and covert measures.
Adding to regional uncertainty, South Korea is reportedly preparing to deploy military assets to support freedom of navigation operations in the strategically important Strait of Hormuz before the end of the year.
These developments continue to sustain geopolitical risk premiums, supporting crude oil prices and maintaining demand for safe-haven assets such as the U.S. Dollar.
Gold Needs a Break Above $4,500 to Confirm Further Upside
Despite lingering headwinds from a stronger dollar, gold appears to have stabilized after its recent corrective decline from the area around $4,700, the highest level since mid-May.
The precious metal remains on track to post moderate weekly gains, but traders are looking for a sustained move above the psychological $4,500 level to confirm a stronger bullish breakout.
With the U.S. jobs report likely to determine the next major move in financial markets, gold traders remain cautious as they await fresh signals on the future path of Federal Reserve policy.