Gold Price Forecast: XAU/USD awaits US Nonfarm Payrolls data for a sustained upside

Gold remains capped below $5,100 early Wednesday, gathering pace for the US labor data.
The US Dollar licks its wounds amid persistent Japanese Yen strength and potential downside risks to the US jobs report.
Gold holds above $5,000 amid bullish daily RSI, with eyes on 61.8% Fibo resistance at $5,141.

Dhwani Mehta FXStreet

Gold is finding its feet above the $5,000 mark early Wednesday, struggling to build on the latest uptick as buyers turn cautious ahead of the delayed release of the US Nonfarm Payrolls (NFP) data.

Gold eyes US NFP for a fresh directional impetus.

Gold seems to be gathering pace for a sustained leg up, as traders eagerly await the January labor report, which was pushed back due to a four-day government shutdown that ended last week.

The final benchmark revision to the annual NFP print will also be published at 13.30 GMT on Wednesday, as a trade-off between US employment and inflation data comes to the fore. The US Consumer Price Index (CPI) report will be published on Friday.

Economists expect the headline NFP to rise by 70,000 in January after having reported a 50,000 job gain in December. Meanwhile, the preliminary estimate of the benchmark revision released last September indicated a downward adjustment to total NFP of -911,000 for the twelve months ended in March 2025.

The Unemployment Rate is set to remain at 4.4% during the same period and is likely to have less significance this time, barring any surprises.

So, the big question is, how will Gold react to the NFP data?

In case of a weaker-than-expected headline NFP and a big downgrade to the benchmark revision. US labor market concerns will intensify and ramp up the odds for a June interest rate cut by the Federal Reserve (Fed). The dovish Fed expectations could propel Gold buyers, while fuelling a fresh downtrend in the USD.

On the contrary, an NFP beat and no significant downward revision to the annual benchmark NFP could revive the Gold price correction amid reduced bets for a June Fed rate cut. In this case, the USD will find fresh demand at the expense of non-yielding assets such as Gold.

That being said, Gold is set to experience intense volatility on either a strong NFP report or a weak one. However, any reaction to the US jobs data could be short-lived as traders would turn to Friday’s US inflation showdown for deeper clarity on the Fed’s monetary policy path.

Gold price technical analysis: Daily chart

The 21-day Simple Moving Average (SMA) rises above the 50-, 100-, and 200-day readings, reinforcing a bullish alignment while price holds north of all key measures. All SMAs slope higher, with the 21-day SMA at $4,918.36 offering nearby dynamic support. The Relative Strength Index (14) prints 57.73, neutral-to-bullish, edging higher and supporting upward momentum without reaching overbought.

Measured from the $5,597.89 high to the $4,401.99 low, the 50% retracement sits at $4,999.94, with the 61.8% retracement at $5,141.05 capping the next leg higher. If follow-through fades ahead of that barrier, initial support would come from the rising 21-day SMA at $4,918.36, keeping the broader uptrend bias intact while above that floor.

(The technical analysis of this story was written with the help of an AI tool.)

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.

Why it matters to traders?

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

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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