Gold Forecast: XAU/USD gains momentum after weak NFP data

As the trading week approaches its close, gold is showing a relevant short-term recovery. XAU/USD is up more than 2.00% and is trading back above the 4,000 dollars per ounce area, supported by a weaker US dollar after the NFP release.

For now, this move has allowed gold to recover ground, especially as substitute assets, such as the dollar, show signs of weaker momentum. If this dynamic continues, buying pressure could remain relevant over the next few trading sessions.

NFP day arrives

During today’s session, the United States published its NFP employment report. The data came in at 57,000 jobs, well below the 114,000 expected. This marks an important sign of slowdown, as it is the first reading since March to fall below 100,000 jobs created.

This reading suggests that the slowdown in job creation may be gaining relevance within the US economy. For this reason, the data could become an important factor for the Federal Reserve’s next monetary policy decisions.

Source: TradingEconomics

The impact of the economic data has already been reflected in interest rate expectations for the coming months. Although the July 29 decision still shows a probability above 80% that rates will remain unchanged, the most relevant point appears in the probabilities for the September 16, 2026 meeting.

In that scenario, there is now a probability close to 45% that rates could rise toward the 4.00% area, but there is also a similar probability that rates remain unchanged. This second possibility started to gain ground after the employment data was released, reducing expectations of a clearly more restrictive Fed in September.

In other words, weaker employment could limit the Federal Reserve’s room to adopt a fully aggressive stance over the next few months.

Source: CMEGROUP

This dynamic has been difficult for the US dollar, which is an important substitute asset for gold. Lower expectations of rate hikes can reduce the appeal of dollar-denominated investments, as the market starts to price in a lower chance of higher interest-rate returns.

This is already visible in the DXY index, which measures the dollar’s strength against its main peers. After the data was released, the index started to show a new bearish move, with a relevant negative slope and a move back toward the 100-point area. This shows that, in the short term, demand for the US dollar has started to lose strength.

Source: TradingEconomics

With all of this in mind, the current environment has been favorable for gold in the short term. Over the past few months, the metal had lost appeal due to the strength of substitute markets such as the US dollar. However, as the dollar starts to lose ground, demand for gold is finding room to recover.

For this reason, if the market continues to price in a less aggressive Federal Reserve and the dollar keeps losing strength, gold could maintain relevant buying pressure over the next few trading sessions.

 

Technical outlook for gold

Source: StoneX, Tradingview

• The bearish trendline remains relevant: Despite the recent recovery in gold prices, the daily chart still shows a bearish trendline that has remained in place for several months. For now, the current advance does not seem strong enough to break this technical structure in the short term. If buying pressure fails to stabilize more clearly, this trendline could regain importance over the coming weeks.
   

• RSI: The RSI line has started to move closer to the 50 neutral area. Rather than confirming a strong buying bias, this behavior reflects a balance between buying and selling impulses during recent sessions. This could point to a relevant phase of short-term indecision.
   

• MACD: The MACD shows a similar reading, as the histogram remains close to the 0 neutral area. This suggests that the average strength of short-term moving averages is in neutral territory, reinforcing the possibility of an indecision phase in gold.
   

Key levels to watch:

• 4,345 USD – Crucial resistance: Relevant high area that aligns with the major bearish trendline. Moves toward this zone could start to put the bearish structure at risk and open the door to a possible dominant buying bias over the coming weeks.
   
• 4,182 USD – Nearby barrier: Recent neutrality zone that coincides with important pullbacks from the last few weeks. If price stays too close to this level, it could reinforce a phase of indecision and even open the door to a short-term sideways range.
   
• 3,886 USD – Critical support: Level associated with relevant lows from October 2025 and considered the next important downside barrier. Moves toward this area could bring back a clearer selling bias and extend the bearish trendline over the coming weeks.
   

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25