Overnight, gold built on yesterday’s gains and came within a few dollars of $4,200, hitting its highest level since early last week. Having broken below $4,000 in six sessions since last Wednesday, gold repeatedly found support around $3,950-$3,960. That was good news for the bulls, as a break below there could have set gold up for an even deeper pullback.
Yesterday, the precious metal got another boost following the release of a weak set of labour data. Non-Farm Payrolls came in miles below expectations, and the data from the previous two months were also subject to significant downward revisions. This triggered a sharp selloff in the US dollar as investors shifted their rate hike expectations from the Fed.
The June payrolls report reinforced the view that economic momentum may be slowing. Combined with lower oil prices and moderating inflation pressures, markets have shifted from expecting one or two Fed rate hikes in 2026 to pricing in between zero and one increase. The probability of ‘no change’ before year-end rose to 25% from 17%, weighing on the dollar and helping to boost gold.
The daily MACD has started to turn upwards, which is a positive sign. Gold may need to pull back and consolidate a touch now. But if it can then break through $4,200 on its next rally attempt, then the future will start to look a bit brighter for the bulls.
Source: TN Trader
* The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
