Gold outlook: US employment data in view

In today’s report we are to have a look at the upcoming US Employment data, Trump’s Big Beautiful bill, and the US tariff deadlines . For a rounder view we intend to conclude the report with a technical analysis of gold’s daily chart.  

US employment data due out Thursday

The US Employment data for June is due to be released this Thursday and may garner significant attention from market participants. In particular, the non-farm payrolls figure is expected by economists to come in at 120k, which would be lower than the prior figure of 139k, and even more concerning is the expected uptick in the unemployment rate from 4.2% to 4.3%. Moreover, the average hourly earnings rate on a month-on-month basis is expected to come in at 0.3% which would be lower than the prior rate of 0.4% Overall,  the US employment data is expected by market participants to showcase a loosening labour market which could increase pressure on the Fed to resume on their rate cutting path, which could weigh on the dollar whilst aiding gold’s price given their inverse relationship. In our view, the expected uptick in the unemployment rate may take on greater importance, considering it has remained at 4.2% since March.

Trump’s big beautiful bill faces key hurdles

President Trump’s Big Beautiful Bill is facing staunch opposition in the Senate and apparently the House of Representatives, and with the self-imposed July 4th deadline quickly approaching, it may require serious political maneuvering to get it passed into law on time. Nonetheless, by the nonpartisan Congressional Budget Office has estimated that the bill will increase the U.S debt by roughly $3.3 trillion, which could raise severe questions for the state of the US economy, which is still facing an ever-rising debt burden. In turn, the possibility of the US’s debt burden further increasing, which in turn may result in increased concern over the state of the US economy down the line, may have provided some support for the precious metal’s price.

Tariff deadline quickly approaching

The tariff deadline of July 9th is quickly approaching which would mark the expiration date of a 90-day reprieve of U.S tariffs which President Trump imposed on the 9th of April. The order temporarily reduced country-specific tariffs to 10 percent, whilst opening the door for the various Governments to conduct trade negotiations with the US. However, with the deadline fast approaching there is still a lot to be done and thus should a lack of progress be seen prior to the deadline, market worries about the global economy and a possible resurgence of inflation in the US economy may return. Therefore, given gold’s status as a hedge against inflation, it may see inflows should the aforementioned worries resurface. Whereas, should further trade deals be struck, market worries may ease which in turn could weigh on the price of the precious metal. In our view, the most crucial trade agreement is still the one with China, where the two nations agreed to “an additional understanding of a framework to implement the Geneva agreement”. Nonetheless, a failure to reach a trade deal with crucial trading partners could aid gold’s price and vice versa.

Technical analysis

XAU/USD daily chart

• Support: 3240 (S1), 3115 (S2), 2980 (S3).

• Resistance: 3385 (R1), 3500 (R2), 3645 (R3).

XAU/USD appears to be moving in a sideways fashion. We opt for a sideways bias for the precious metal’s price and supporting our case is the RSI indicator below our chart which currently registers a figure near 50 implying a neutral market sentiment. For our sideways bias to be maintained we would require gold’s price to remain confined between our 3240 (S1) support level and our 3385 (R1) resistance line. On the other hand, for a bullish outlook we would require a clear break above our 3385 (R1) resistance line with the next possible target for the bulls being the 3500 (R2) resistance level. Lastly, for a bearish outlook we would require a clear break below the 3240 (S1) support line with the next possible target for the bears being the 3115 (S2) support level.