The sudden drop in non-farm payroll data triggered a technical counterattack. Has the short-term recovery of gold been completed?
2025-08-04 16:49:43
Last week, gold prices experienced a period of decline followed by a surge. With the Federal Reserve maintaining interest rates and strong economic data, the market initially intensified expectations of a prolonged period of high interest rates, pushing gold prices lower, hitting a low below $3,270. However, last Friday's release of US non-farm payroll data significantly below expectations triggered a sharp shift in market sentiment, with both the US dollar and US Treasury yields retreating. Gold prices rebounded strongly, closing above $3,350, forming a short-term counterattack pattern on the technical side, signaling a possible reversal of the short-term trend.
The Federal Reserve remained on hold last week as expected, but its statement and official comments maintained a hawkish tone. Chairman Powell emphasized that inflation has not yet fully eased and that the Fed is "not yet ready to ease policy." Meanwhile, second-quarter GDP growth reached an annualized 3%, and ADP private employment also showed strong growth, solidifying market expectations of continued tightening. Gold prices came under significant pressure in the initial trading.
But a turning point came last Friday. July's nonfarm payrolls added only 73,000 jobs, far below market expectations. The previous figure was revised downward by 258,000, and the unemployment rate rose to 4.2%. This weak report heightened market concerns about the economic outlook. The CME FedWatch tool showed the probability of a September rate cut jumped to nearly 70%, up from less than 30% previously. This turning point in interest rate expectations triggered a strong rebound in gold prices.
In addition, the tariff agreement reached between the United States and the European Union has suppressed safe-haven demand to a certain extent, but this round of gold price rise is more dependent on adjustments in policy expectations rather than increased geopolitical risks.
Looking at the daily chart, gold is finally showing a key rebound signal after a long period of sideways trading. Last week, it dipped below $3,270, briefly touching the lower Bollinger band before quickly rebounding, signaling a "false breakout." The current price is firmly above the middle band (3,340.11), giving bulls confidence to resume their bullish trend.
The MACD indicator shows that although the main line (DIFF) is still below the signal line (DEA), the distance between the two is narrowing, and the momentum of the green column has also weakened significantly, which may indicate that the divergence has ended and the golden cross is approaching, and the technical rebound has the potential to continue.
The RSI indicator has also rebounded from oversold territory and is currently at 52.24, initially breaking above the mid-axis, breaking the previous weak pattern. Analysts believe that if subsequent momentum follows, it is expected to push gold prices to test the upper resistance of $3,407. A break above this level will open up greater upside potential.
In terms of support, analysis shows that in the short term, focus on the support of the middle Bollinger band of $3,340 and the previous low of $3,270; the resistance level is $3,450 and the previous high of $3,499.
From a market perspective, last Friday's price action clearly reflected a reversal of sentiment. Previously, the consensus that interest rates would remain high for a long time dampened gold's appeal, with funds flowing into equities and short-term bonds. However, with the slowdown in non-farm payroll data, the market is re-pricing the policy path, and gold has become a safe haven and a hedge against interest rate uncertainty.
However, it's worth noting that this reversal in sentiment is still in its early stages. The Federal Reserve has yet to clearly signal a dovish shift, and inflation data remains uncertain. While market sentiment has improved, gold's upside may remain limited if subsequent data doesn't continue to support it (for example, if this week's ISM Services PMI comes in above expectations).
The market is currently in a middle ground of "loosening expectations but no consensus has been formed". Although the sentiment is warm, the belief is not solid.
Short-term outlook:
Judging from the daily chart structure and indicators, gold is expected to continue its current rebound. Analysts believe that if this week's services PMI or inflation data continue to weaken, expectations of a September Fed rate cut will further intensify, potentially pushing gold prices above $3,400. In the short term, traders are watching to see whether bullish momentum can continue to increase and break through the previous high near $3,451 to form a new upward trend.
Long-term outlook:
Despite the recent rebound in gold prices, from a macroeconomic perspective, major central banks around the world have yet to fully embrace easing, the Federal Reserve remains cautious, and inflation remains volatile. As a hedge asset, gold's macrocyclical trend remains at a critical turning point. Analysts believe that if the Federal Reserve maintains a dovish stance, gold prices may strengthen in the medium term; otherwise, this rebound may simply be a technical pullback within a weak trend.
The key variables still lie in: the pace of inflation decline and whether the labor market continues to weaken. Only when macroeconomic signals form expectations of "systemic easing" can gold truly break away from the consolidation range and restart a new round of trend.
Fundamentals
The Federal Reserve remained on hold last week as expected, but its statement and official comments maintained a hawkish tone. Chairman Powell emphasized that inflation has not yet fully eased and that the Fed is "not yet ready to ease policy." Meanwhile, second-quarter GDP growth reached an annualized 3%, and ADP private employment also showed strong growth, solidifying market expectations of continued tightening. Gold prices came under significant pressure in the initial trading.
But a turning point came last Friday. July's nonfarm payrolls added only 73,000 jobs, far below market expectations. The previous figure was revised downward by 258,000, and the unemployment rate rose to 4.2%. This weak report heightened market concerns about the economic outlook. The CME FedWatch tool showed the probability of a September rate cut jumped to nearly 70%, up from less than 30% previously. This turning point in interest rate expectations triggered a strong rebound in gold prices.
In addition, the tariff agreement reached between the United States and the European Union has suppressed safe-haven demand to a certain extent, but this round of gold price rise is more dependent on adjustments in policy expectations rather than increased geopolitical risks.
Technical aspects:
Looking at the daily chart, gold is finally showing a key rebound signal after a long period of sideways trading. Last week, it dipped below $3,270, briefly touching the lower Bollinger band before quickly rebounding, signaling a "false breakout." The current price is firmly above the middle band (3,340.11), giving bulls confidence to resume their bullish trend.
The MACD indicator shows that although the main line (DIFF) is still below the signal line (DEA), the distance between the two is narrowing, and the momentum of the green column has also weakened significantly, which may indicate that the divergence has ended and the golden cross is approaching, and the technical rebound has the potential to continue.
The RSI indicator has also rebounded from oversold territory and is currently at 52.24, initially breaking above the mid-axis, breaking the previous weak pattern. Analysts believe that if subsequent momentum follows, it is expected to push gold prices to test the upper resistance of $3,407. A break above this level will open up greater upside potential.
In terms of support, analysis shows that in the short term, focus on the support of the middle Bollinger band of $3,340 and the previous low of $3,270; the resistance level is $3,450 and the previous high of $3,499.
Market sentiment observation:
From a market perspective, last Friday's price action clearly reflected a reversal of sentiment. Previously, the consensus that interest rates would remain high for a long time dampened gold's appeal, with funds flowing into equities and short-term bonds. However, with the slowdown in non-farm payroll data, the market is re-pricing the policy path, and gold has become a safe haven and a hedge against interest rate uncertainty.
However, it's worth noting that this reversal in sentiment is still in its early stages. The Federal Reserve has yet to clearly signal a dovish shift, and inflation data remains uncertain. While market sentiment has improved, gold's upside may remain limited if subsequent data doesn't continue to support it (for example, if this week's ISM Services PMI comes in above expectations).
The market is currently in a middle ground of "loosening expectations but no consensus has been formed". Although the sentiment is warm, the belief is not solid.
Market outlook:
Short-term outlook:
Judging from the daily chart structure and indicators, gold is expected to continue its current rebound. Analysts believe that if this week's services PMI or inflation data continue to weaken, expectations of a September Fed rate cut will further intensify, potentially pushing gold prices above $3,400. In the short term, traders are watching to see whether bullish momentum can continue to increase and break through the previous high near $3,451 to form a new upward trend.
Long-term outlook:
Despite the recent rebound in gold prices, from a macroeconomic perspective, major central banks around the world have yet to fully embrace easing, the Federal Reserve remains cautious, and inflation remains volatile. As a hedge asset, gold's macrocyclical trend remains at a critical turning point. Analysts believe that if the Federal Reserve maintains a dovish stance, gold prices may strengthen in the medium term; otherwise, this rebound may simply be a technical pullback within a weak trend.
The key variables still lie in: the pace of inflation decline and whether the labor market continues to weaken. Only when macroeconomic signals form expectations of "systemic easing" can gold truly break away from the consolidation range and restart a new round of trend.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
