Gold prices are holding steady near all-time highs around $3,600 per ounce, as markets digest last week’s explosive rally. The precious metal’s surge, driven by weak U.S. labor data and rising expectations of aggressive Federal Reserve rate cuts, has now entered a consolidation phase, with investors cautiously eyeing upcoming U.S. inflation figures.
Fed Rate Cut Bets Keep Gold Supported
The disappointing U.S. Nonfarm Payrolls (NFP) report revealed just 22,000 new jobs added in August — far below expectations — while June data was revised lower to show job losses for the first time since 2020. Unemployment ticked up to 4.3%, and wage growth slowed to 3.7% year-on-year, reinforcing fears of a cooling labor market.
Traders responded quickly, with markets now pricing in not just one, but potentially three Fed rate cuts before year-end. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making the yellow metal more attractive to both institutional and retail investors.
USD Rebound Caps Gold’s Upside
Despite strong fundamentals, gold faced mild pressure at the start of the week as the U.S. Dollar Index (DXY) rebounded from one-month lows. A positive tone in equity markets also dampened safe-haven demand, temporarily capping further upside for bullion.
Still, analysts note that any significant dollar recovery may be short-lived, with Fed easing bets and ongoing central bank gold purchases acting as long-term bullish anchors.
Technical Picture: Consolidation Before the Next Move
From a charting perspective, gold remains in overbought territory after its meteoric rally to $3,578 per ounce, with the Relative Strength Index (RSI) still above 70. This suggests that short-term consolidation or a minor pullback is healthy before another leg higher.
- Immediate Support: $3,545, followed by $3,510–$3,500
- Deeper Support: $3,440 (previous breakout zone)
- Resistance Zone: $3,560 to $3,579 (record peak)
- Next Target: $3,600 psychological level and beyond
As long as gold holds above $3,500, the broader bullish structure remains intact.
What Traders Should Watch Next
The key catalyst now is the release of U.S. inflation data later this week, particularly the Core Personal Consumption Expenditures (PCE) Index, the Fed’s preferred inflation gauge. Stronger-than-expected numbers could strengthen the dollar and slow gold’s rally, while softer inflation would likely add momentum to the bullish trend.
Additionally, geopolitical tensions and ongoing tariff disputes remain in the background, further supporting safe-haven flows into gold.
Outlook: Healthy Pause Before the Next Rally
Gold’s consolidation near record highs signals resilient investor demand rather than weakness. The mix of slowing labor data, rate cut expectations, and central bank buying continues to paint a bullish long-term picture. Short-term dips are expected to attract fresh buyers, keeping the yellow metal firmly in uptrend mode.
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