Gold Holds Near Two-Week High as Traders Await US Payrolls Data

Traders' Opinions

Summary:

Gold steadies near $4,722 as traders await US payrolls data, while Middle East tensions, weaker Dollar sentiment, and shifting Fed expectations continue to drive cautious market positioning.

BUY XAUUSD

EXP

PENDING

4700.00

Entry Price

4850.00

4620.00

4714.90 +29.83 +0.64%

Pips

PENDING

4620.00

Exit Price

4700.00

Entry Price

4850.00

Gold prices held firm on Friday, with XAU/USD trading near the $4,722 region, although bullish momentum remained limited as investors avoided aggressive positioning ahead of the highly anticipated US Nonfarm Payrolls report. The precious metal continues to hover below Thursday’s two-week peak near $4,764, but remains on track to post its first weekly gain in three weeks.

The recent recovery in Gold has largely been driven by renewed weakness in the US Dollar and a pullback in Oil prices, as markets cautiously price in the possibility of a diplomatic breakthrough between the United States and Iran. Hopes that both sides could eventually reach an agreement to de-escalate the conflict have helped improve overall market sentiment and reduced some of the extreme safe-haven demand seen earlier in the week.

However, geopolitical risks remain firmly embedded in the market narrative. Reports of renewed exchanges of fire near the Strait of Hormuz on Thursday briefly reignited concerns over potential disruptions to global energy supply chains. Despite the escalation, US President Donald Trump attempted to calm markets, insisting that the ceasefire agreement remains active while simultaneously warning Tehran that Washington stands ready to respond aggressively if negotiations fail.

In my view, this conflicting backdrop continues to create a highly unstable environment for Gold traders. On one hand, easing geopolitical tensions and softer Oil prices reduce immediate safe-haven demand for bullion. On the other, the persistent uncertainty surrounding the Middle East conflict, combined with ongoing concerns about inflation and global growth, continues to underpin demand for defensive assets.

Oil prices, although lower than last week’s highs, remain historically elevated as supply risks tied to the Strait of Hormuz persist. Since nearly a fifth of global Oil shipments pass through the region, markets remain sensitive to any signs of renewed disruption. Elevated energy prices also continue to complicate the inflation outlook, reinforcing expectations that major central banks — particularly the Federal Reserve — may be forced to keep interest rates elevated for longer.

That dynamic has prevented Gold from staging a more aggressive breakout despite the weaker Dollar environment. Higher interest rates tend to weigh on non-yielding assets such as Gold by increasing the opportunity cost of holding bullion.

Attention now turns squarely toward the US labor market data, which could become the next major catalyst for price action across financial markets. Economists expect the US economy to have added roughly 62,000 jobs in April, sharply lower than the 178,000 increase recorded in March, while the unemployment rate is projected to remain steady at 4.3%.

A weaker-than-expected payrolls reading would likely strengthen expectations for Federal Reserve rate cuts later this year, potentially pressuring the US Dollar further and offering additional support to Gold prices. Conversely, a stronger labor market report could reinforce the Fed’s higher-for-longer policy stance, limiting upside momentum in bullion and potentially triggering short-term profit-taking after this week’s recovery.

For now, Gold appears trapped between competing forces of geopolitical uncertainty, shifting Fed expectations, and cautious pre-NFP positioning, leaving traders reluctant to commit to a decisive directional move.

Technical Analysis

From a technical perspective, Gold is attempting to stabilize after breaking decisively out of a broader descending channel that dominated price action through the second half of April and early May. On the 2-hour chart, XAU/USD has transitioned from a corrective bearish structure into a more constructive recovery phase, with prices now consolidating near the $4,700 region after an aggressive rebound from the $4,520 support zone.

The breakout above the descending channel represents a significant technical shift and suggests that bearish momentum has weakened considerably. More importantly, buyers managed to reclaim the key $4,680–$4,700 region, which previously acted as a major resistance barrier throughout the decline. This zone is now evolving into an important near-term support area, and continued price acceptance above it reinforces the bullish outlook.

Although upside momentum has slowed slightly following the sharp rally earlier this week, the current consolidation appears corrective rather than reversal-driven. Gold is essentially digesting gains beneath the next major resistance band around $4,760–$4,850, where sellers previously regained control. In my view, as long as prices continue to hold above the broken channel structure and maintain support above $4,680, the broader recovery trend remains intact.

On the upside, bullish traders are closely watching a decisive break above the $4,760 resistance region. A sustained push through this level would likely confirm continuation of the breakout structure and expose the next upside target near $4,850. Beyond that, a move toward the psychological $4,900 handle could accelerate momentum buying and attract renewed safe-haven inflows, particularly if geopolitical risks remain elevated or US Dollar weakness persists.

On the downside, immediate support is located around the $4,680–$4,700 area, which aligns closely with the recent breakout zone and short-term consolidation range. A break below this support could trigger a deeper pullback toward $4,600, where buyers previously stepped back into the market aggressively. Beneath that, the $4,520 support zone remains the key structural floor for the broader bullish recovery. A sustained move below that level would invalidate the breakout narrative and expose Gold to a deeper corrective decline.

Momentum indicators continue to favor the upside despite signs of near-term cooling. The Relative Strength Index (RSI) likely remains above the neutral 50 mark after recently approaching overbought territory during the breakout rally. This suggests bullish momentum remains dominant, although some consolidation may occur before the next directional move. Meanwhile, the Moving Average Convergence Divergence (MACD) appears to remain above the zero line, reinforcing the improving bullish structure, though flattening momentum signals that buyers may require a fresh catalyst to extend gains immediately.

Overall, the technical structure increasingly favors bullish continuation following the breakout from the descending channel. While short-term consolidation may persist near current levels, the broader setup suggests Gold remains positioned for another leg higher as long as support zones continue to hold.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 4,700

STOP LOSS: 4,620

TAKE PROFIT: 4,850

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Gold Holds Near Two-Week High as Traders Await US Payrolls Data

Technical Analysis

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