Gold rises after July NFP data misses forecast

• Gold surges to $3,350, up nearly 2.0%, following a weaker-than-expected July NFP report.
• The US economy adds 73K jobs, missing the consensus of 110K.
• US President Donald Trump’s sweeping tariff executive order renews trade tensions, limiting Gold’s downside.

Gold (XAU/USD) surges to $3,350 on Friday after a weaker-than-expected US Nonfarm Payrolls (NFP) report triggers a broad US Dollar sell-off and revives Fed rate cut bets. The yellow metal had been treading water near $3,300 during European trading hours, pressured by a firm US Dollar and the Fed’s data-dependent hawkish stance.

However, the disappointing July NFP print triggered a sharp repricing in rate expectations, with markets now assigning a 67.1% probability to a September Fed rate cut, up from just 37% earlier in the day. The dovish shift fueled a strong rally in Gold, which surged nearly 2.0% during the American trading session, climbing above the $3,350 psychological mark.

Gold rebounded sharply on Thursday after hitting a one-month low on Wednesday, but couldn’t hold those gains overnight with sellers pushing the price below $3,300, as sustained strength in the US Dollar dented sentiment, driving prices back below this psychological level. A strong Greenback raises the opportunity cost of holding non-yielding assets. While price action remains confined within a familiar range on Friday, reflecting market indecision ahead of the NFP report, ongoing US tariff tensions are offering some support and helping to limit downside pressure.

Market movers: Markets eye NFP after Trump’s tariff shock and solid US data

• July’s NFP report showed the US economy added just 73,000 jobs in July, far below the market consensus of over 100,000 and marking the smallest monthly gain this year, while previous months’ job gains were revised sharply lower by a combined 258,000, further dampening sentiment toward the US Dollar. The Unemployment Rate ticked up to 4.2% in July from 4.1% in June, aligning with market expectations. The modest rise reflects easing labor market conditions and reinforces the overall dovish tone of the July jobs report.
• Wage growth held steady in July, offering a mixed signal on underlying inflation pressures. Average Hourly Earnings rose 0.3% MoM, in line with expectations and up from the 0.2% gain in June. On a yearly basis, wages increased 3.9% YoY, slightly above forecasts of 3.8% and unchanged from the prior reading.
• On Thursday, US President Donald Trump signed a sweeping executive order imposing new reciprocal tariffs ranging from 10% to 41% on imports from nearly 70 countries. Among the hardest hit countries are India, Canada, Switzerland, Taiwan and Brazil. The move escalates global trade tensions and threatens to disrupt supply chains at a time when inflation concerns are reemerging. While the initial deadline was set for August 1, the executive order states that the new tariffs will generally take effect from August 7.
• The Trump administration has introduced a universal 10% tariff on imports from countries where it runs a trade surplus, and a 15% minimum rate for roughly 40 nations with which it holds a trade deficit.
• Tariff uncertainty lingers for two of the US key trading partners as China and Mexico are still locked in unresolved negotiations. China’s temporary tariff relief is set to expire on August 12, after which duties could rise to 15% or more if no agreement is reached. Meanwhile, Mexico has secured a 90-day extension, maintaining its current tariff regime for now but leaving the door open to steeper hikes later this year.
• The yield on the 10-year US Treasury slipped to around 4.24%, while the 30-year yield eased to 4.81% on Friday, with both benchmarks hovering near one-month lows. The drop in yields reflects a cautious shift in investor sentiment following the softer-than-expected July Nonfarm Payrolls report. Lower yields reduce the opportunity cost of holding non-yielding assets like Gold, fueling a sharp rebound in XAU/USD after a week of bearish price action.
• The US economy grew at a 3.0% annualized rate in the second quarter, marking a strong rebound from the prior quarter’s contraction. Core Personal Consumption Expenditure (PCE) inflation, the Fed’s preferred measure, held steady at 2.8% YoY in June, slightly above expectations of 2.7. Meanwhile, private payrolls rose by 104,000 in July, recovering from a decline in the previous month and signaling continued strength in the labor market.
• Markets reacted swiftly, according to the CME Fedwatch tool, the probability of a September interest rate cut by the Fed fell to around 39%, down sharply from 65%. Meanwhile, odds for a 25 basis point cut in October stand near 47% as persistent inflation reinforces the central bank’s “wait-and-see” approach.
• Alongside the July NFP report, which is expected to show a gain of 110K jobs, down from 147K in June, the US economic docket on Friday will feature several high-impact indicators. These include Average Hourly Earnings, the Unemployment Rate, the ISM Manufacturing Purchasing Managers Index (PMI) and the Michigan Consumer Sentiment Index.

Technical analysis: XAU/USD recovers sharply as NFP disappoints

On the daily chart, XAU/USD is trading sideways around the $3,300 mark after dropping to a one-month low on Wednesday. Since then, price action has been consolidating in a narrow range, showing no clear directional bias.

The $3,270-$3,250 zone marks the first key support, aligned with the 100-day Exponential Moving Average (EMA) and a prior demand area. A decisive break below this level could open the door toward deeper support near $3,150. On the upside, immediate resistance stands at $3,350, which coincides with the middle Bollinger Band.

Momentum indicators paint a cautious picture. The Relative Strength Index (RSI) sits at 44, reflecting bearish sentiment while pointing to the neutral line. The Average Directional Index (ADX) remains extremely low at 11.76, indicating a lack of trend strength and overall market indecision.

Gold may continue to consolidate in its current trading range unless the July NFP report sparks a strong market reaction.