Gold eyes breakout as weak jobs data and political risks boost safe-haven demand

Gold (XAUUSD) prices are holding steady as investors react to weak U.S. jobs data and rising political uncertainty. The disappointing employment report raised doubts about the strength of the U.S. economy. Expectations for a Fed rate cut increased sharply. At the same time, political moves stirred concern about data credibility. These factors have boosted demand for gold as a safe-haven asset and set the stage for a potential breakout. Technical patterns suggest ongoing consolidation within an ascending channel, hinting at an impending breakout.

Inflation fears and a weak job market are boosting gold demand

Gold prices hovered near recent levels as investors faced renewed economic uncertainty. Weak U.S. employment numbers released on Friday shook market confidence. The Bureau of Labour Statistics reported only 73,000 new jobs in July, far below the estimate of 110,000. The unemployment rate also ticked up to 4.2%. These disappointing figures signaled renewed stress within the U.S. labour market.

The weak employment numbers reignited concerns about the overall strength of the U.S. economy. Investors quickly adjusted expectations. The probability of a September rate cut jumped from 50% to 80% after the jobs report. The U.S. Dollar came under pressure, and Treasury yields dropped across the board. This change in outlook boosted demand for gold as a safe-haven asset.

Further adding to uncertainty, President Trump fired BLS Commissioner Erika L. McEntarfer. The move sparked fears that the credibility of U.S. economic data may be compromised. Markets worry that the administration might try to manipulate inflation numbers. This could affect the Federal Reserve's independence. Such political developments strengthened demand for gold, a traditional refuge in uncertain times.

Gold forms bullish triangle pattern within ascending channel

The gold chart below shows a well-defined ascending channel that has shaped the market’s upward trajectory since early 2024. This bullish structure has led prices to repeatedly bounce off support and stall near the channel’s upper boundary. The pattern highlights steady buying interest on dips and a disciplined technical framework guiding price action.

Currently, gold is trading around $3,357, sitting in the middle of the channel after forming a consolidation triangle. The triangle, forming in the upper portion of the channel, signals a textbook continuation setup. The market appears to be coiling within this structure. A breakout above the upper boundary near $3,450 could pave the way for renewed bullish momentum.

Support levels between $3,150 and $3,200 provide a strong foundation. The lower red dashed trendline and the channel median offer solid backing within this range. A break below this area could challenge the bullish outlook, though the broader pattern remains intact. Traders should monitor volume and momentum closely. A breakout above $3,450 with strong volume would confirm upside potential, possibly driving prices toward $3,700–$3,800. Failure to do so could extend the consolidation or trigger a corrective move.

Conclusion

Gold remains in a holding pattern as traders navigate mixed economic signals and rising political risks. Weak U.S. jobs data and leadership uncertainty have revived safe-haven demand, keeping gold supported within a strong technical structure. The consolidation within the ascending channel suggests that the market is preparing for its next move. A breakout above $3,450 could ignite fresh bullish momentum, while a drop below $3,150 may challenge the current trend. Traders should stay alert as momentum builds toward a decisive shift in direction.

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