Gold Holds Near Two-Week High as Weak Jobs Data Reshapes Fed Rate Expectations

Gold (XAU/USD) is on track for its first weekly gain in five weeks, trading just below $4,200 heading into Friday's European session, marking its third consecutive day of gains as traders scale back expectations for further Federal Reserve policy tightening. Spot gold traded near $4,137 on Friday after rising more than 2% in the previous session, according to Trading Economics data.

What's Driving the Move

Thursday's US Nonfarm Payrolls report came in below market expectations, with the economy adding 57,000 jobs in June compared with the consensus forecast of 110,000. Meanwhile, May's payroll figure was revised down to 129,000 from 172,000.

The unemployment rate edged lower to 4.2%, although the decline was accompanied by a reduction in labor force participation, suggesting that the improvement may not fully reflect stronger labor market conditions.

Following the release, market pricing shifted toward fewer expected Federal Reserve rate increases in 2026, according to the CME FedWatch Tool. The change in expectations contributed to a softer US dollar and provided support for non-yielding assets such as gold.

Geopolitical Risks Remain in Focus

Gold's gains have been moderated by continued uncertainty surrounding US-Iran negotiations.

According to The New York Times, US officials were concerned that Israel could target Iran's senior negotiators during ongoing talks, a scenario they believed could disrupt negotiations and increase regional tensions.

Separately, Iran's military command warned that any US intervention in the Strait of Hormuz would trigger a "decisive and swift response."

These developments could continue to influence market sentiment, supporting demand for safe-haven assets while also affecting movements in the US dollar.

Technical Levels to Watch

Gold has moved above its 100-period Simple Moving Average (SMA) and the 23.6% Fibonacci retracement of the April–June decline, which may support a constructive near-term technical outlook.

Meanwhile, the Relative Strength Index (RSI) is trading near 68, approaching overbought territory, a reading often interpreted as suggesting that upside momentum could begin to moderate.

Resistance levels are located around $4,301 (38.2% Fibonacci retracement), followed by $4,412 and $4,522.

Support levels are seen near $4,165, with additional support from the 100-period SMA around $4,143. A sustained move below these levels could increase the likelihood of a retest of the $3,944 area.

Why It Matters for Southeast Asian Traders

With US financial markets closed on Friday for the Independence Day holiday, trading volumes may be lighter than usual, which could contribute to increased intraday price volatility.

Regional market participants may monitor price movements within the current technical range while also following developments related to the Strait of Hormuz, as geopolitical headlines could remain an important source of market volatility in the coming week.

Technical analysis and pricing data were sourced from Trading Economics and the CME FedWatch Tool. This content is provided for informational purposes only and does not constitute investment advice.1