(Kitco News) – Gold prices pushed higher during the U.S. holiday-shortened week as softer labor-market data, less aggressive Fed commentary, and a weaker U.S. dollar helped the precious metal rebound from another test of support below $4,000 per ounce to reclaim the $4,100 level.
Spot gold kicked off the week trading at $4,079.50 per ounce on Sunday evening, but early gains quickly faded as the metal slipped back toward the $4,000 support level on Monday and Tuesday. May JOLTS data showed job openings and hires little changed at 7.6 million and 5.2 million, respectively, while June ISM manufacturing remained in expansion territory at 53.3%, keeping markets focused on whether the Federal Reserve still had room to stay hawkish. Gold ultimately set its weekly low at $3,941.87 per ounce on Tuesday before buyers stepped back in.
The rebound gained traction Wednesday after ADP reported that private employers added 98,000 jobs in June, while Fed Chair Kevin Warsh said inflation risks had eased but avoided giving any firm signal on the next rate move. Gold pushed back above $4,100 as traders trimmed expectations for an imminent rate hike and positioned ahead of Thursday’s early release of the June nonfarm payrolls report.
Thursday’s jobs data provoked the strongest move of the week, with nonfarm payrolls rising by just 57,000 in June, well below expectations, while the unemployment rate held near 4.2%. The softer report pushed the dollar lower, eased pressure from Treasury yields, and helped gold extend its rally to a weekly high of $4,143.60 per ounce.
Heading into the Independence Day market closure, spot gold was trading near $4,120 per ounce, enabling the yellow metal to snap a string of weekly declines and deliver its strongest weekly gain since late May.
The latest Kitco News Weekly Gold Survey showed bulls back in the driver’s seat on both Wall Street and Main Street after gold reclaimed $4,100 ahead of the Independence Day long weekend.
“I am bullish on Gold for the coming week,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “Gold has been trending downward for the last three months but appears to be stabilizing. Although easing tensions in the Gulf remain a headwind for precious metals, in the short term, easing concerns about a potential US interest rate hike, between falling energy prices and this week’s soft US employment numbers, have opened a pathway for the US Dollar to correct and Gold to potentially stage a short-term bounce.”
“Up,” said Adrian Day, president of Adrian Day Asset Management. “The latest US economy reports, the lower oil price on the back of a tentative truce in Iran, and some comments from Fed Chairman Kevin Warsh have all tempered rate hike expectations. Meanwhile, central banks and Tether continue to buy.”
“Up,” said Darin Newsom, senior market analyst at Barchart.com. “From a technical point of view, and by that I mean statistics that algorithms may be using, the August futures contract seems to be building bullish momentum on its daily chart. This could possibly invite a round of buying into the market. However, implied volatility has also been creeping up, sitting at roughly 23.7% heading into Thursday’s session. While still below the high of 31.7% from last March, it is above the low of 20.4% from early June.”
“Why does any of this matter?” Newsom asked. “Because classic technical and fundamental analysis takes a back seat to figuring out what makes algorithms move, other than not necessarily the Truth Social media posts and related manufactured headlines.”
“Up,” said Rich Checkan, president and COO of Asset Strategies International. “With the bounce off psychological resistance at $4,000, gold is set to move higher. Dealers and investors see that level as an attractive entry point, and I expect they will be taking advantage of it.”
Kevin Grady, president of Phoenix Futures and Options, told Kitco News that gold’s post-payrolls spike isn’t anything to get excited about.
He said that the combination of weaker-than-expected jobs growth in June and the large downward revisions to previous reports are forcing market participants to adjust their rate hike expectations. He pointed to Bank of America predicting three hikes by the end of the year as a particularly pessimistic outlook, and said that another relatively weak employment report will be enough to take any rate hikes off the table for the duration of 2026.
Turning to gold, Grady emphasized that the sharp upward price move seen in the wake of the payrolls release looked very algo-driven to him, and that the daily volume on the front month Comex gold contract had just barely broken 100,000. He said he expects gold to trend lower in the near term, with neither $4,000 nor $3,900 support holding, but said he expects buyers to step in around $3,750 per ounce.
Looking ahead at the long weekend, Grady pointed out that while Globex will still be trading until 1:00 p.m. Friday afternoon, he thinks most experienced traders will want to be flat gold over the Independence Day weekend, because the risk of volatility at these low volumes outweighs the opportunity.
This week, 16 analysts participated in the Kitco News Gold Survey, with a strong majority of Wall Street respondents turning bullish after gold broke its four-week streak of declines. 11 experts, or 69%, expected to see gold prices gain ground during the week ahead, while only two, representing 13% of the total, predicted a price decline. The remaining three analysts, or 19%, saw the yellow metal trending sideways next week.
Meanwhile, 183 votes were cast in Kitco’s online poll, with Main Street investors also returning to their bullish baseline after gold’s solid performance. 99 retail traders, or 54%, looked for gold prices to rise next week, while 45 others, or 25%, predicted the yellow metal would lose ground. The remaining 39 investors, representing 21% of the total, expected to see consolidation during the coming week.
U.S. market participants should be able to ease themselves into the workweek following their long Independence Day weekend, as the economic news calendar is among the sparsest of the year.
Monday will see the release of the ISM Services PMI for June, with traders looking for confirmation of the payrolls report in the service sector data. Then on Tuesday, the Reserve Bank of New Zealand will issue its monetary policy decision.
The highlight of the week will likely be the Wednesday afternoon release of the minutes from the June FOMC meeting, which, given new chair Warsh’s terse communication style, will offer the first real look at the internal workings of the new-look Federal Reserve.
The week’s data wraps up on Thursday morning with the release of weekly jobless claims.
“Gold appears to have forged a shelf in recent days at $3943-$3960, and after the softer-than-expected US jobs growth, the yellow metal rose to $4140 basis spot,” said Marc Chandler, managing director at Bannockburn Global Forex. “That is a new high for the week. The nearby hurdle is the 20-day moving average (~$4164), which gold has not settled above since mid-May.”
“The momentum indicators are poised to turn up,” Chandler added. “I suspect that in the coming weeks, there is potential toward $4260.”
Adam Button, head of currency strategy at Forexlive.com, told Kitco News that while gold's Friday run above $4,100 per ounce after the nonfarm payrolls report was an encouraging sign, he doesn't expect the yellow metal to break out of its recent channel between $4,000 and $4,400 anytime soon.
Looking at the broader market, Button said that it's difficult for him to believe in a resumption of the gold rally until European and developing market equities also resume their strong performances from earlier this year in a sustained manner. He said that US equities continue to be valued extremely high, and as long as the American AI sector continues to suck up all of the money, the US dollar will remain strong, and it will be difficult for gold to make serious gains.
Regarding the impact of oil prices and the Strait of Hormuz, Button said that he's honestly surprised to see gold trading around $67 per barrel, even as Iran continues to fire on some vessels, and there is no clear and final resolution to the conflict on the horizon. Button also pointed out that while an increasing number of oil tankers have exited the Straight, he doesn't believe very many empty tankers have entered it to refill, casting doubt on the upbeat narrative of a resumption of regular flows.
Looking ahead, Button said that while the worst of the seasonals are now behind gold, he expects trading to remain relatively thin and prices to remain range bound until the fall at the earliest, before the yellow metal’s seasonal strong period kicks in.
He said that central banks may resume the steady accumulation of 2025 and earlier this year if gold stays around $4,000 per ounce, and pointed out that despite all the drama, Türkiye may come out of its recent foreign exchange debacle in decent shape if they manage to buy their gold reserves back at $4,000 per ounce after selling them at materially higher prices during the early part of the Iran conflict.
Button added that the example of Türkiye underlines the importance of central banks maintaining sizable gold reserves, not only to support the value of their currencies, but also to liquidate in times of crisis.
Ole Hansen, head of commodity strategy at Saxo Bank, sees gold still trending sideways for some time, but thinks the bottom may be in.
“Despite the improvement, gold remains in a consolidation phase following its sharp correction over recent months, with some investors still using rallies to reduce exposure,” Hansen said. “Overall, the combination of lower energy prices, easing inflation expectations, a weaker dollar and softer yields suggests the market is moving closer to establishing a cyclical low.”
Alex Kuptsikevich, senior market analyst at FxPro, expects gold prices to gain ground next week.
“The second quarter was the worst for gold since 2013,” he noted. “The precious metal fell out of favour due to the conflict in the Middle East and the associated rise in oil prices, as well as fears that surging inflation would force the Fed to keep interest rates high for an extended period. The central bank’s ‘hawkish’ shift under Kevin Warsh temporarily pushed prices below $4,000 per ounce. Nevertheless, surveys continue to indicate that global central banks remain committed to buying gold rather than dollar-denominated assets, and the latest US employment report proved ideal for bullish sentiment. It was weak enough to dampen expectations of an imminent key rate hike, but not so weak as to alarm economists about a looming recession. As a result, the dollar has weakened, allowing gold to strengthen sharply and defend the $4,000 level.”
“Hopes are once again rising that the decline over the last four months was a technical correction to the three-year rally, and that a new upward momentum will now begin from the 61.8% Fibonacci retracement.”
Michael Moor, founder of Moor Analytics, expects to see gold prices climb further in the coming days.
“In a Higher time frame: I cautioned on 8/16/18 the break above $1,183.0 warned of renewed strength,” he said. “We have seen $4,443.1. This is ON HOLD. We held exhaustion with a 56268 high and rolled over $1,651.1. This is ON HOLD. On a medium timeframe basis: The trade below 52554 projected this down $740 (+)—we attained $1,300.0. The trade below 52036 brought in $1,248.2 of pressure. The trade below 51606 brought in $1,205.2 of pressure. These are ON HOLD.”
“On a lower timeframe basis: We held exhaustion with a 49177 high and rolled over $962.3,” Moor said. “The break below 48185 projected this down $185 (+)—we attained $863.1. The trade below 47923 projected this down $205 (+)—we attained $836.9. The break below 47420 brought in $786.6 of pressure. On 5/15 we left a medium bearish reversal—we have come off $597.8 from 45532. We held exhaustion with a 44036 high and rolled over $448.2. On 6/18 we left a minor bearish reversal--we have come off $323.9 from the 42793 open. These are ON HOLD.”
“We held macro exhaustion again at 39741-357 with a 39554 low and bounced $175.6—if this holds and we start a bona fide bullish correction, the minimum target is 49636,” he added. “The trade above 40288 (-11 tics per/hour) brought in $102.2 of strength. These are ON HOLD. The failure back below 40963 (+10 per/hour) has brought in $54.2 of pressure—decent trade back above will take bullish calls off hold, but I would not lean against this as a long again.”
At the time of writing, spot gold last traded at $4,123.60 per ounce for a gain of 2.32% on the week and 2.28% on the day.
