Dollar Strength Caps Gold
Gold Finds Support Near $3,500 After Pullback From Record High
During Thursday’s early European session, the price of gold (XAU/USD) recovered slightly from the psychological $3,500 mark after hitting a fresh all-time high on Wednesday, though it still trades with modest daily losses. The precious metal, which had posted seven consecutive days of gains, is now under pressure from a combination of fundamental factors.
A relative calm in the bond market and stability in equity indices have eased investor concerns, reducing demand for traditional safe-haven assets such as gold. Meanwhile, a slight uptick in the US Dollar (USD) has prompted some traders to take profits amid overbought conditions on short-term charts. However, widespread expectations that the US Federal Reserve will cut interest rates later this month have capped any significant USD strength and continue to lend support to gold prices.
The US Job Openings and Labor Turnover Survey (JOLTS) for July showed a decline in job openings to 7.18 million, reinforcing market bets on a Fed rate cut. On the trade front, recent remarks by the US President about seeking to overturn a federal court ruling that deemed most tariffs illegal have added a layer of uncertainty to the markets, which could work in gold’s favor.
Traders are now eyeing Thursday’s US economic data, including the ADP private-sector employment report, weekly Initial Jobless Claims, and the ISM Services PMI. However, the main market focus remains on Friday’s Nonfarm Payrolls (NFP) report for August, which will be key in shaping expectations for the Fed’s policy path and, in turn, influencing demand for both the USD and gold.
Technical Outlook: From a technical perspective, the daily pullback in gold has found support near the 23.6% Fibonacci retracement of the recent rally from around $3,300, as well as the 100-day Simple Moving Average (SMA). A decisive break below $3,500 could open the door for a deeper decline toward the $3,440 area — a multi-month range barrier, the breach of which would signal a potential trend reversal in favor of sellers.
On the upside, initial resistance is seen near $3,560. A break above this level could pave the way for a retest of the record high at $3,578–$3,579, with the $3,600 mark as the next bullish target.