Gold Update: XAU/USD Shows Neutrality Following Friday's NFP Report

The trading week is getting underway and, for now, gold has struggled to maintain the strength that characterized its performance in previous weeks. Average price action over the last two sessions shows a decline of roughly 1.5%, reflecting a loss of momentum that has started to highlight a more neutral market environment. This dynamic has remained in place following last Friday's NFP report, an event that has helped restore some confidence around the U.S. dollar. As long as this catalyst remains relevant, XAU/USD could continue displaying a more balanced trading environment during the coming sessions.

What Is Expected from the Federal Reserve Now?

The end of last week was marked by one of the most important economic releases of the short term: the U.S. Non-Farm Payrolls (NFP) report, which measures changes in employment during August. The figure surprised markets after showing 162,000 new jobs compared with expectations of only 55,000, confirming that labor market activity continues to display considerable resilience within the U.S. economy.

This result remains relevant not only for economic growth expectations but also for the potential path of Federal Reserve policy in the months ahead. A strong labor market generally provides greater room for the central bank to maintain a restrictive stance while inflation concerns remain present.

This interpretation was quickly reflected in market expectations. The CME Group probability tracker currently shows roughly a 60% probability of a rate hike at the September 16 meeting. In addition, if the increase does not occur in September, markets still assign approximately a 54% probability of a hike in October. Overall, investors have once again begun leaning toward a potentially more aggressive Federal Reserve.

Source: CMEGROUP

This environment has become somewhat less favorable for gold because it has restored the appeal of important alternative markets such as U.S. Treasury bonds. Both bonds and gold are often viewed as defensive assets but rising Treasury yields increase the relative attractiveness of fixed-income investments compared with an asset that does not generate interest.

In fact, following the NFP release, 10-year Treasury yields resumed their upward trend and continue to trade near the 4.8% area, corresponding to the highest levels recorded in 2026. As long as yields remain elevated, they could continue attracting capital that might otherwise flow into the gold market.

Source: TradingEconomics

It is also worth monitoring activity in the gold futures market following the end of last week. Trading volume failed to show significant growth and reached only around 220,000 contracts, remaining below the highs registered in August.

A similar situation can be observed in Open Interest, which also failed to record meaningful gains during the latest sessions. Since this indicator measures the total number of open positions in the market, its stability suggests that there was no substantial influx of new long positions after the NFP release. Overall, futures market activity has begun to reflect a more cautious tone that coincides with expectations of a more restrictive Federal Reserve in the months ahead.

Source: CMEGROUP

As a result, the current backdrop remains important for gold because alternative markets such as Treasury bonds continue to offer considerable appeal. As long as this situation persists, gold demand may continue facing difficulties in regaining momentum. Under this scenario, a phase of indecision or even moderate selling pressure could remain relevant within XAU/USD price action over the coming sessions.

 

Gold Technical Outlook

Source: StoneX, Tradingview

• Neutrality Begins to Gain Relevance: Although the daily gold chart continues attempting to maintain a potential bullish trendline, the lack of direction observed in recent price action has once again become evident. This situation may pose a challenge to the development of a stronger bullish structure and, as long as indecision remains dominant, it could even begin creating room for a more apparent short-term trading range.
   

• RSI: The RSI continues to fluctuate near the neutral 50 level. This reading reflects a balance between bullish and bearish momentum observed over recent sessions. As long as this behavior persists, it could continue reinforcing the importance of a neutral phase within the chart.
   

• MACD: A similar picture can be seen in the MACD, whose histogram continues to develop near the neutral 0 line. This suggests balance within the average strength of short-term moving averages and supports the possibility that indecision remains an important feature of the market.
   

Key Levels to Watch:

 

• $4,530 – Critical Resistance: An important upside barrier that coincides with the 200-period Simple Moving Average and remains one of the most important technical references on the chart. Price action returning toward this area could revive bullish momentum and strengthen the potential bullish trendline observed in recent weeks.
   
• $4,380 – Nearby Barrier: The main equilibrium zone on the chart and a level that was respected on several occasions during the previous week. As long as price continues to develop around this area, a neutral environment could remain dominant and a broader sideways structure may begin to consolidate.
   
• $4,200 – Critical Support: This level coincides with recent lows, the 50-period moving average, the Ichimoku Cloud, and the base of the potential bullish trendline. This combination makes it one of the most important support areas on the chart. Sustained price action below this level could alter the current market structure and favor a more dominant bearish bias over the coming sessions.
   

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25