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Gold Price Forecast: Will Powell and Payrolls drive the next leg higher in XAU/USD?

  • Gold price treads water above $3,100 on NFP day after Trump’s tariffs-led volatile Thursday.
  • US Dollar and US Treasury bond yields lick wounds amid recession fears and dovish Fed bets.
  • Gold buyers could jump back as the daily RSI again prods the bullish zone.
  • US Nonfarm Payrolls and Powell’s speech will be closely eyed for the next direction in Gold price.

Gold price is taking a breather early Friday after witnessing a volatile trading day on Thursday. Traders are consolidating the weekly gains, slightly away from the record high of $3,168, bracing for the US Nonfarm Payrolls (NFP) report and US Federal Reserve (Fed) Chair Jerome Powell’s speech for a fresh directional impetus.  

Gold price keeps the bullish momentum intact

Gold price is soaking in a tumultuous Thursday after a ‘sell everything’ mode gripped markets in reaction to US President Donald Trump’s highly-anticipated ‘reciprocal tariffs’.

Late Wednesday, “US President Donald Trump unveiled a 10% baseline tariff on most goods imported to the US, with much higher duties on products from dozens of countries. Chinese imports will be hit with a 34% tariff, on top of the 20% Trump previously imposed, bringing the total new levy to 54%,” per Reuters. The EU faces a 20% tariff, and Japan, which is targeted for a 24% rate.

In the first half of the day, the Gold price continued to rise and reached a new all-time high of $3,168, as Trump’s tariffs heightened concerns over a potential global trade war that could tip the global economy into recession.

US recession fears sent the US Dollar (USD) and US Treasury bond yields plummeting, as markets fully priced in a Fed rate cut for June. Meanwhile, Fed funds futures now indicate roughly 96 basis points (bps) worth of cuts by December, compared to closer to 70 bps shortly before Trump's tariffs were announced on Wednesday, according to the LSEG data.

However, the tide turned against the bright metal in the latter part of the day as traders took profits off the table after the recent record run and also to cover their losses as global stocks were hammered.

Attention now turns to the critical US employment data due later in American trading on Friday, followed by Fed Chair Powell’s speech. Both these events will help markets gauge their expectations for future Fed rate cuts amid fresh signs on the US labor market and insights into the economic outlook.

Gold price could resume its record rally if the headline NFP reading disappoints and comes in below the expected 135,000 in March. Downbeat US payrolls data will likely reaffirm the dovish expectations surrounding the Fed’s interest rates outlook, providing additional support to the non-yielding Gold price.

However, any reaction to the US NFP data could be short-lived as the end-of-the-week flows and Powell’s words could take over and drive the Gold price movement heading into the weekend.

Gold price technical analysis: Daily chart

The daily chart shows that the 14-day Relative Strength Index (RSI) has re-entered the bullish zone, easing off the overbought region, indicating that a fresh upswing remains in the offing.  

If the uptrend resumes, Gold price will need to find acceptance above the previous close of $3,115.

The next topside targets are aligned at the $3,150 psychological barrier and the record high of $3,168.

If the correction gathers strength, the Gold price could challenge the week’s low of $3,054.

Additional declines will call for a test of the 21-day Simple Moving Average (SMA) at $3,026, below which the $3,000 mark will come into play.

Economic Indicator

Nonfarm Payrolls

The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews ​and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.

Read more.

Next release: Fri Apr 04, 2025 12:30

Frequency: Monthly

Consensus: 135K

Previous: 151K

Source: US Bureau of Labor Statistics

America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.

Author

Dhwani Mehta

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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