Gold (XAU/USD) traded in a narrow range around $4,050 during the European session on Tuesday, with investors showing caution ahead of the upcoming United States Nonfarm Payrolls (NFP) data for July, scheduled for release later in the week [1]. According to economists at Deutsche Bank, the July payrolls report is expected to show a modest acceleration in hiring, with employment growth forecast at +65,000, slightly above June’s +57,000 reading. The unemployment rate is projected to remain at 4.2%, though there is a risk it could round up to 4.3% if labor force participation rebounds after last month’s sharp decline [1]. Average hourly earnings are anticipated to rise by +0.3% month-on-month, unchanged from June, and average hours worked are expected to hold steady at 34.3 hours [1].
Market participants are closely monitoring these labor market indicators, as the results will influence expectations for the Federal Reserve’s monetary policy. The CME FedWatch tool indicates a 63.6% probability that the Fed will raise interest rates at its September meeting. Higher interest rates typically weigh on non-yielding assets like gold, contributing to the current sideways movement in the gold price [1].
In addition to the NFP, investors are also awaiting the US JOLTS Job Openings data for June, set to be released at 14:00 GMT. Strategists at Danske Bank note that job openings have shifted moderately higher this year, which has historically signaled rising wage pressures. This supports their broader view that strengthening US labor demand could lead to renewed upward pressure on wages as the economic cycle matures [1].
From a technical perspective, XAU/USD remains flat at around $4,050.80, trading below the 20-day Exponential Moving Average (EMA) at $4,072.96, which maintains a bearish near-term bias. The Relative Strength Index (14) is in the 40.00–60.00 range, indicating consolidative price action. Key resistance is at the 20-day EMA ($4,072.96), with a daily close above this level potentially opening the way for a corrective bounce toward the July 22 high near $4,166. On the downside, immediate support is at last week’s low of $3,996.13, followed by the June 30 low at $3,941.76 [1].
CONCLUSION
Gold prices are consolidating as investors await key US labor market data and the Federal Reserve’s next move. The outcome of the NFP and JOLTS reports, along with Fed rate hike expectations, will likely determine the near-term direction for gold. Until then, the market remains cautious and range-bound.