Gold Surges on Weak US NFP Data, Beating Key Resistance Level

The price of gold has surged by 2.33% to $4,399 per ounce, driven by weak US non-farm payrolls data and a depreciation in the US dollar index.

The sharp downside surprise in July's NFP numbers, which contracted by 23,000 compared to an expected increase of 80,000, has diminished expectations of a hawkish Federal Reserve stance ahead of its next interest rate decision.

This shift in market probability is reflected in the CME FedWatch Tool, which now indicates that there's only a 44% chance of a 25-basis-point interest rate increase and a 56% likelihood that benchmark rates will remain unchanged at 3.75% during the September meeting.

From a technical perspective, gold futures continue to maintain a robust long-term bullish trajectory, with several key observations including higher highs and higher lows on daily timeframes, a breach of a downward trendline, and resistance levels at $4,500 and $4,870.