On Friday, futures stabilized following softer-than-expected U.S. payrolls data, which alleviated concerns regarding rising interest rates and contributed to a notable recovery.
The print dampened expectations that the Federal Reserve will hike interest rates this year, given that a strong labor market is one of the central bank’s main conditions for tightening policy.
The data lent gold some relief after concerns over higher rates battered bullion through the second quarter. Gold wiped out some 13% in the June quarter, while also reversing all gains for the year.
The fell from near 13-month highs after Thursday’s data, spurring gains across metal markets. Gold and precious metals were nursing deep losses in the second quarter, amid growing fears that the Fed will raise interest rates this year.
The Labor Department said the U.S. economy added 57,000 jobs in June, well below economists’ expectations of 110,000, while the unemployment rate stood at 4.2%, slightly below forecasts of 4.3%.
The softer labor market data reinforced expectations that the Fed could keep borrowing costs unchanged in the near term, reducing bets on another rate hike this year, but the prevailing energy-generated inflation fear is still intact while the US-Iran conflict reaches its 126th day, and the negotiation between the US and Iran paused today due to the slain ayatollah’s funeral after Trump and mediators claimed progress.
I feel that these numbers suggest this was not necessarily the start of a new trend and take some wind out of the sails of the call for imminent rate hikes, as a soft July CPI report should bolster the case for a prolonged Fed pause.
On Friday, the US market will remain closed to celebrate the 250th Independence Day, while the US President is stuck in a peace deal with Iran as the peace accord, signed on June 17, 2026, has a catch-22 position in a clause, ensure an over stretch this probe to resolve without emphasizing most important issues like de-nuclearization of Iran and limit its claim over the Strait of Hormuz.
On Friday, after opening the day at $4,139.64, tested the day’s high at $4,207.90, and the day’s low at $4,136.20, gold futures are trading at $4,182, facing tough resistance at the 20 EMA ($4,199.38), and trying to hold above the immediate support at the 9 EMA ($4,127), where a breakdown could push the futures to test the key support at $4,093.95, and a breakdown below this could trigger selling.
Undoubtedly, despite gaining some strength today, after yesterday’s bullish move following the announcement of soft job data, gold futures are still trading well below the significant resistance at the 200 EMA ($4,268.92), which ensures a significant build-up in selling pressure and the continuation of weakness till today’s close.
However, speculative positions created after Thursday’s job data could be shed before today’s closing, as President Trump changes his stance, especially on weekends. This weekend matters a lot as the US is celebrating its 250th Independence Day this weekend, and Trump could change his stance on ongoing talks with Iran. And, if he does so, it will provide a big jolt for the markets.
Disclaimer: Readers are advised to take any position in gold at their own risk, as this analysis is based solely on observations.
