FX.co ★ Fixy | XAU/USD, GOLD

Gold prices fell to around $4,395 an ounce in early Asian trading, extending their decline, as strong US jobs data bolstered market expectations of an interest rate hike by the Federal Reserve. Data from the US Bureau of Labor Statistics showed that nonfarm payrolls increased by 162,000 jobs in August, far exceeding the revised gain of 21,000 in July and surpassing market expectations of 56,000. This unexpectedly upbeat report significantly diminished gold's appeal as investors quickly adjusted their positions in anticipation of a sharp monetary tightening by the Fed. Independent analysts noted that unless upcoming inflation data is significantly weak, the robust job growth will greatly increase the likelihood of a rate hike in September. Therefore, market participants are now turning their attention to the US Producer Price Index (PPI) and Consumer Price Index (CPI) inflation data, due later this week, hoping for a clearer understanding of the Fed's overall monetary policy direction. In a rapid shift in market sentiment, the CME FedWatch tool showed that market expectations for a September interest rate hike have surged to around 58.3%, compared to a 50/50 split in previous trading sessions. Adding to the downward pressure on precious metals are escalating geopolitical tensions in the Middle East, which have reignited concerns about inflation fueled by rising oil prices. Reports indicate that Iran attacked several unauthorized oil tankers in the Strait of Hormuz, along with US vessels, in retaliation for weekend clashes. These developments could push global energy prices higher, further complicating overall inflation expectations and reinforcing the hawkish stance of central bank officials. On the other hand, persistent doubts about the inevitability of a September monetary policy change have provided some support for gold. These doubts were initially fueled by dovish comments from Federal Reserve Chairman Christopher Waller, who emphasized indicators of easing price pressures. Commerzbank notes that these ongoing concerns are helping to protect gold prices from a sharp decline, as traders carefully balance the strength of macroeconomic data with continued political uncertainty.

Technically, the daily chart shows that although the price of gold against the US dollar (XAU/USD) has retreated from its highs, it is still slightly biased upwards, primarily due to its position above the 100-day simple moving average. The price is currently hovering below the middle 20-day Bollinger Band, indicating a consolidation phase within an overall uptrend. Meanwhile, the 14-day Relative Strength Index (RSI) is holding steady around 51, suggesting neutral but stable market momentum, with previous overbought conditions having completely dissipated. On the upside, initial resistance lies near the middle 20-day Bollinger Band, around $4465. The upper Bollinger Band, around $4,675, will form a strong resistance level should buyers regain control of the market. On the downside, immediate support for gold lies near the recent close at around $4,405, followed by the 100-day simple moving average at around $4,350. A break below these levels could push gold down to the lower Bollinger Band area around $4,260, where strong buying interest is expected to return. With a busy data schedule this week, including key inflation indicators and ongoing geopolitical tensions, gold's short-term movements will largely depend on whether upcoming consumer data reinforces expectations of an interest rate hike or provides room for a technical rebound.