Gold prices suddenly collapse from high levels! Bulls evacuate urgently before non-farm payrolls, is the 3500 line of defense in danger?
2025-09-04 15:12:32
During the Asian and European trading hours on Thursday (September 4th), spot gold continued its correction from the previous trading day's all-time high of $3,578-3,579, falling 1.33% (nearly $50) to $3,511.44 per ounce. It has now recovered slightly to around $3,540. Calming global bond markets have eased investor anxiety, as evidenced by the stable performance of the stock market. This environment has triggered some profit-taking in overbought safe-haven precious metals. Furthermore, the emergence of US dollar buying has weakened gold demand, exacerbating the current technical correction. However, continued bargain-hunting support has continued to support gold prices.
Meanwhile, the U.S. JOLTS job openings data released on Wednesday indicated a cooling labor market, further reinforcing market expectations of a Federal Reserve rate cut later this month. Furthermore, the market generally expects the Fed to make at least two 25 basis point rate cuts before the end of the year, which could act as resistance to the dollar and provide support for gold prices.
The market may be more inclined to wait for the release of the U.S. non-farm payroll report on Friday to obtain clearer clues on the Fed's interest rate cut path before making a new directional layout.
Spot gold came under downward pressure on Thursday, mainly due to two factors: on the one hand, global risk aversion cooled significantly, bond market volatility fell and global stock markets stabilized, which weakened the attractiveness of gold as a traditional safe-haven asset; on the other hand, the US dollar index strengthened slightly, combined with the overbought state of gold's short-term technical chart, which together triggered long positions to take profits.
It is worth noting that this pullback occurred after gold prices rose continuously in the past two weeks and hit a record high, which is a typical technical correction .
Despite the short-term strength of the US dollar, its continued upward momentum is limited. Market expectations are that the Federal Reserve will resume its interest rate cut cycle at its September meeting. This expectation was reinforced by the JOLTS report released on Wednesday: job openings fell to 7.18 million in July (the previous value was revised down to 7.35 million), marking the third consecutive month of decline. This indicates a continued cooling of the labor market, providing data support for the Fed's interest rate cut.
There's a new twist in the trade arena. US President Trump said on Tuesday his administration will seek an immediate Supreme Court hearing on tariffs, attempting to overturn a federal appeals court ruling that most tariffs are illegal. This move has injected new uncertainty into the market and could spark safe-haven demand, supporting gold prices and limiting downside.
The market focus today shifted to the release of US economic data on Thursday evening: ADP private sector employment data, weekly initial jobless claims and ISM services PMI. These data will provide a basis for further judgment on the labor market and service industry conditions.
However, the market's core focus remains on Friday's release of the August non-farm payroll report , which will be seen as a key reference for the Federal Reserve's September interest rate decision. This data is expected to directly impact the US dollar's short-term performance and provide a new directional driver for gold prices . Given the current fundamentals, gold still has a medium- to long-term bullish outlook, with continued demand for bargain hunting. Investors should be wary of the risks of excessive short-term bets.
From a technical perspective, on the downside, the intraday correction in gold prices found support near the 23.6% Fibonacci retracement level of the recent rally (starting from the 100-day moving average, around $3,300).
If further selling pressure intensifies and gold prices effectively break below the psychologically important $3,500 level, a deeper technical correction could be triggered, with the downside target being the $3,440 area. This level represents resistance at the upper limit of the multi-month trading range, and a break below it would signal a top in gold prices, turning the short-term trend bearish.
On the upside, if gold prices rebound, the $3,560 area may form initial resistance, followed by the $3,578-3,579 area (the all-time high set on Wednesday). If it can break through this area, gold prices may continue to move into uncharted territory and are expected to challenge the $3,600 mark (the theoretical target of the range breakout).
(Spot gold daily chart, source: Yihuitong)
At 15:10 Beijing time, spot gold was trading at $3536.81 per ounce.
Meanwhile, the U.S. JOLTS job openings data released on Wednesday indicated a cooling labor market, further reinforcing market expectations of a Federal Reserve rate cut later this month. Furthermore, the market generally expects the Fed to make at least two 25 basis point rate cuts before the end of the year, which could act as resistance to the dollar and provide support for gold prices.
The market may be more inclined to wait for the release of the U.S. non-farm payroll report on Friday to obtain clearer clues on the Fed's interest rate cut path before making a new directional layout.
Stabilizing market sentiment and a stronger dollar suppress gold prices
Spot gold came under downward pressure on Thursday, mainly due to two factors: on the one hand, global risk aversion cooled significantly, bond market volatility fell and global stock markets stabilized, which weakened the attractiveness of gold as a traditional safe-haven asset; on the other hand, the US dollar index strengthened slightly, combined with the overbought state of gold's short-term technical chart, which together triggered long positions to take profits.
It is worth noting that this pullback occurred after gold prices rose continuously in the past two weeks and hit a record high, which is a typical technical correction .
Despite the short-term strength of the US dollar, its continued upward momentum is limited. Market expectations are that the Federal Reserve will resume its interest rate cut cycle at its September meeting. This expectation was reinforced by the JOLTS report released on Wednesday: job openings fell to 7.18 million in July (the previous value was revised down to 7.35 million), marking the third consecutive month of decline. This indicates a continued cooling of the labor market, providing data support for the Fed's interest rate cut.
There's a new twist in the trade arena. US President Trump said on Tuesday his administration will seek an immediate Supreme Court hearing on tariffs, attempting to overturn a federal appeals court ruling that most tariffs are illegal. This move has injected new uncertainty into the market and could spark safe-haven demand, supporting gold prices and limiting downside.
The market focus today shifted to the release of US economic data on Thursday evening: ADP private sector employment data, weekly initial jobless claims and ISM services PMI. These data will provide a basis for further judgment on the labor market and service industry conditions.
However, the market's core focus remains on Friday's release of the August non-farm payroll report , which will be seen as a key reference for the Federal Reserve's September interest rate decision. This data is expected to directly impact the US dollar's short-term performance and provide a new directional driver for gold prices . Given the current fundamentals, gold still has a medium- to long-term bullish outlook, with continued demand for bargain hunting. Investors should be wary of the risks of excessive short-term bets.
Gold prices may accelerate their correction and may fall below the 23.6% Fibonacci retracement level and the psychological barrier of $3,500.
From a technical perspective, on the downside, the intraday correction in gold prices found support near the 23.6% Fibonacci retracement level of the recent rally (starting from the 100-day moving average, around $3,300).
If further selling pressure intensifies and gold prices effectively break below the psychologically important $3,500 level, a deeper technical correction could be triggered, with the downside target being the $3,440 area. This level represents resistance at the upper limit of the multi-month trading range, and a break below it would signal a top in gold prices, turning the short-term trend bearish.
On the upside, if gold prices rebound, the $3,560 area may form initial resistance, followed by the $3,578-3,579 area (the all-time high set on Wednesday). If it can break through this area, gold prices may continue to move into uncharted territory and are expected to challenge the $3,600 mark (the theoretical target of the range breakout).
(Spot gold daily chart, source: Yihuitong)
At 15:10 Beijing time, spot gold was trading at $3536.81 per ounce.
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