FX.co ★ Der | XAU/USD, GOLD

Gold began the week slightly lower, continuing its downward trend and struggling near the $4,400 level. The price fell further due to tighter liquidity caused by the Labor Day holiday in the United States. Despite the current pressure on gold, market sentiment suggests it has not lost its competitive edge, as complex macroeconomic factors continue to influence its trajectory. The main headwind for gold stems from the recent surge in global oil prices, which has reignited inflation fears and fueled widespread speculation that global central banks may tighten monetary policy. Since gold, a non-income asset, typically performs well in low interest rate environments due to its low opportunity cost, market expectations of a sharp monetary tightening by the Federal Reserve and its international counterparts will significantly diminish its appeal. Friday’s unusually strong US jobs report further heightened macroeconomic concerns, reinforcing market expectations that the Federal Reserve may tighten monetary policy even more at its next meeting in September. Specifically, non-farm payrolls surged by 162,000 jobs in August, far exceeding market expectations of 56,000, while the unemployment rate remained at a healthy 4.1%. Analysts at TD Securities noted that this stronger-than-expected data strongly reinforced the notion of economic resilience, indicating a recovery in the private sector and suggesting that the overall labor market is not only stable but may even be improving. Consequently, the interest rate futures market continues to price in a roughly 57% probability of a Federal Reserve rate hike this month, with the market now fully focused on the key inflation indicator, the Consumer Price Index (CPI), due on Friday.

Despite these strong bearish factors, the dollar's weakness and relative stability have eased downward pressure on gold. Forex traders quickly absorbed the dollar's gains following the release of the non-farm payrolls data. This cautious stance toward the dollar stems primarily from structural concerns about the growing size of the US national debt and the Bank of Japan's shift toward a more hawkish monetary policy, which has led to a significant appreciation of the yen and direct pressure on the USD/JPY pair. Furthermore, forex and commodity traders have largely ignored recent geopolitical events, such as the US-Iranian military standoff in the Strait of Hormuz, focusing instead on domestic inflation indicators and holiday-related liquidity concerns. Looking ahead, should the geopolitical situation in the Middle East escalate, triggering a new influx of safe-haven funds into the US dollar, gold will remain highly vulnerable to sharp declines; the current low trading volumes could exacerbate intraday price volatility. Technically, spot gold is trading near $4,401 on the daily chart, closely tracking key moving averages, reflecting a neutral short-term bias. Gold prices found support from fundamental demand during the dips, holding above the 50-day simple moving average (SMA) (around $4,247) and the 100-day SMA (around $4,350). However, upward attempts are still hampered by the 21-day SMA (around $4,463) and the 200-day SMA (around $4,536), which are acting as strong resistance. Meanwhile, the Relative Strength Index (RSI) is hovering near the neutral 50 level, confirming that the market is currently consolidating rather than forming a clear trend. On the upside, there is immediate resistance near the 21-day SMA, while a stronger upper limit is near the 200-day SMA, where sellers are expected to maintain their positions. On the downside, initial support lies near the 100-day SMA; a break below this level could trigger a deeper correction.