Gold Breaks Key Resistance as Weak US NFP Data Dims Rate Hike Bets
Gold prices surged on August 7, reaching $4,399 per ounce, as investors sought refuge in bullion following weak US non-farm payrolls data. The gold futures contract (GCZ6) appreciated by 2.33%, driven by diminished expectations of a hawkish Federal Reserve stance ahead of its next interest rate decision.
The US Bureau of Labour Statistics reported that Non-Farm Payrolls contracted by 23,000 in July, a sharp downside surprise compared to the consensus expectation of 80,000 new jobs. As a result, the CME FedWatch Tool indicated that the implied market probability of a 25-basis-point interest rate increase fell from 54% to approximately 44%. Currently, FedWatch probabilities signal a 56% likelihood that the Federal Reserve will maintain benchmark interest rates unchanged at the current level of 3.75% during its September meeting.
Technical analysis reveals that gold futures continue to maintain a robust long-term bullish trajectory, with a clear bullish market structure defined by higher highs and higher lows on daily timeframes. The price action has breached a downward trendline, suggesting a potential continuation of the recovery. Key technical ceilings include $4,500 and $4,870, while immediate short-term support is located at $4,000.