Gold’s been drifting sideways since April and this time, it’s more than just safe-haven noise.
With Friday’s Nonfarm Payrolls (NFP) looming, XAU/USD is hovering near $3,350, squeezed between weak labor signals and Trump’s tax bomb that could stoke fresh inflation.
Here’s what traders need to know before NFP:
1. Soft ADP Data Hints at Cracks in Labor Market
Wednesday’s ADP print showed a shocker: instead of the expected 99,000 job gain, the U.S. private sector lost 33,000 jobs. That’s the kind of miss that raises eyebrows and gold bids.
As a leading indicator for NFP, the ADP miss has traders bracing for more softness in the labor market. If Friday confirms it, rate cut bets will ramp up, and bullion could finally break higher.
2. NFP Expectations Set the Stage
Economists expect Friday’s NFP to come in at 111,000, down from May’s 139,000. The Unemployment Rate is forecast to tick higher to 4.3% from 4.2%.
More job market weakness? That’s fuel for gold bulls. With non-yielding assets like gold thriving in low-rate environments, any signal of economic slowdown or Fed dovishness keeps XAU/USD supported.
3. Powell Sticks to the Script But Traders Smell September
[#ECBForum2025] At the ECB Forum in Sintra, Portugal, Chair Powell reiterated that the Fed will remain in “wait-and-see” mode, citing tariff policy uncertainty as a key factor influencing the rate path. Market expectations for a September rate cut have slightly cooled. 📉🇺🇸🇪🇺
— #john smith (#@john856121)
6:37 AM • Jul 2, 2025
At the ECB Forum in Sintra, Fed Chair Powell emphasized a data-dependent approach. “Meeting by meeting,” he said, meaning September’s still wide open for a cut.
That cautious stance didn’t slam the door on easing. And with job data softening and inflation plateauing, traders see a growing case for a cut within two months. That’s quietly bullish for gold.
4. Trump’s Mega-Bill Adds to the Inflation Fire
The Big Beautiful Bill will add roughly $3.3 Trillion to the U.S. Deficit warns the Congressional Budget Office 🚨🚨🚨
— #Barchart (#@Barchart)
9:20 PM • Jun 29, 2025
The $3.3 trillion “Big Beautiful Bill” cleared the Senate and now heads to the House. It’s massive, controversial, and likely to weigh on the dollar if passed.
With critics, including Elon Musk, calling it inflationary, the legislation adds another layer of uncertainty. If passed by July 4, it could trigger more USD downside and strengthen the case for gold as a hedge.
5. Gold Eyes Key Technical Levels
Gold (XAU/USD) is pressing just above the 50-day SMA near $3,350, but momentum remains capped below key resistance between $3,370 and $3,426. The zone has rejected multiple upside attempts since April, and until that ceiling gives way, price action remains range-bound and cautious.
Price continues to lean on a rising trendline support that’s been respected since mid-April, intersecting with the 50-day SMA around $3,322. That level, alongside the psychological $3,300 mark, remains the first line of defense for bulls.
Here’s the Takeaway:
Gold’s taking a breather, but it’s not sleeping. With ADP already flashing weakness and NFP on deck, the market’s holding its breath. Add Trump’s inflation-heavy tax plan and Powell’s slow nod toward September cuts, and you’ve got a powder keg.
For now, $3,350 is the battleground. If NFP misses, don’t be surprised if bulls charge for $3,400 and beyond. If not, it’s back to the range grind, until the next spark.
