Created
: 2025.06.06
2025.06.06 21:14
Gold (XAU/USD) has fallen back into a narrow range of consolidation on Friday, trading around $3,363 at the time of writing and with Investors remaining on high alert ahead of the Nonfarm Payrolls (NFP) report release.
The NFP data is expected to show that 130,000 jobs were created in the US labour market in May, down from 177,000 in April and the Unemployment Rate is likely to remain unchanged at 4.2%.
If the US labour market shows clear signs of weakness, the Federal Reserve (Fed) may consider cutting interest rates in July, which could support demand for Gold as it has an inverse relationship with rates.
Friday's focus remains on the ongoing trade discussions between the US and China, following the positive phone call between US President Donald Trump and Chinese President Xi Jinping on Thursday, where they agreed to restart high-level economic talks. The agenda includes resolving tariff disputes and improving relations, but there's skepticism among investors about how much progress will be made. This, coupled with the uncertainty around US-Mexico tariffs, could keep market sentiment cautious, supporting Gold prices.
If trade disputes intensify or fail to find a resolution, it could lead to an economic slowdown, weaker equity markets, and increased demand for safe-haven assets, such as Gold.
Gold is trading within a narrow range for the last four days, holding above the $3,350 level since XAU/USD recovered above it on Monday.
With a rising channel forming since the May 15 low, the price is currently nearing the lower bound of the pattern, providing imminent support at $3,360. Below that, the $3,350 psychological level remains firm, a break of which could see a move to the 20-day Simple Moving Average (SMA) at $3,297.
Meanwhile, as the Relative Strength Index (RSI) remains above the neutral zone in the daily chart, a reading of 56 suggests that bullish momentum has not entirely faded.
Gold daily chart
For an upside move, the Gold price has a few technical hurdles to clear. The $3,392 resistance level has limited the bullish potential throughout the week, followed by the $3,400 psychological level. If bulls clear this zone and bullish momentum gains traction, a move toward the April all-time high at $3,500 may be possible.
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
Read more.Next release: Fri Jun 06, 2025 12:30
Frequency: Monthly
Consensus: 130K
Previous: 177K
Source: US Bureau of Labor Statistics
America's monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve's mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.
Created
: 2025.06.06
Last updated
: 2025.06.06
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