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Gold Price Forecast: XAU/USD down but not out as focus shifts to more US data

  • Gold keeps running into fresh offers at $5,100 as traders weigh the latest US jobs report.   
  • The US Dollar meets fresh supply as USD/JPY sellers return; focus shifts to Friday’s critical inflation test.
  • Gold closed Wednesday below $5,100, but daily RSI backs bullish potential, with eyes on 61.8% Fibo resistance at $5,141.

Gold is back in the red near $5,050 early Thursday, having faced strong offers at around the $5,100 mark once again. Buyers keep a close eye on the mid-tier US Jobless Claims data and US-Iran geopolitical developments to regain control.

Gold buyers pause before the next push higher

Despite the pullback from the eight-day high of $5,119 set on Wednesday, Gold’s downside remains cushioned, courtesy of the renewed selling interest seen in the US Dollar (USD).

The Greenback continues to reel from the ‘rub-off’ effect from the ongoing USD/JPY downtrend, fuelled by Japan’s Prime Minister (PM) Sanae Takaichi’s landslide victory in the snap elections and looming forex intervention risks.

This USD/JPY bearishness overshadows the strong January labor market report from the United States (US), released on Wednesday, leaving the USD broadly vulnerable.

US Nonfarm Payrolls (NFP) Nonfarm Payrolls in January increased by 130,000, much higher than the estimated figure of 70,000. The Unemployment Rate unexpectedly ticked down to 4.3% from 4.4% in December 2025. 

The blockbuster jobs data almost priced out a March interest rate cut by the US Federal Reserve (Fed), while slightly scaling back the odds for a June rate reduction, according to the CME Group’s FedWatch Tool.

This change in the market expectations reinforced sentiment around the narrative of higher rate for longer, lifting the USD and the two-year US Treasury bond yields at the expense of the non-yielding Gold.

However, the USD uptick quickly faded and limited the Gold retreat as markets digested the final revision to the annual NFP benchmark, which showed the economy added only 181,000 jobs in 2025 instead of the previously estimated 584,000, per Reuters.

Additionally, looming tensions between the US and Iran garnered attention once again, keeping Gold buyers hopeful.

“After talks with Israeli PM Benjamin Netanyahu on Wednesday, President Donald Trump said they reached no "definitive" agreement on how to move forward with Iran but he insisted negotiations with Tehran would continue to see if a deal can be achieved,” Reuters reported.

Next of note, for Gold markets, remains the US Jobless Claims data due later on Thursday, which could shed more light on the US labor market conditions.

However, Friday’s US Consumer Price Index (CPI) data will be the real test for Gold buyers, as the inflation report could reaffirm bets for two Fed rate cuts this year, the first potentially seen in June.

Gold price technical analysis: Daily chart

Chart Analysis XAU/USD

The 21-day Simple Moving Average (SMA) climbs above the 50-, 100- and 200-day SMAs, with all slopes advancing and highlighting a firm bullish structure. Price holds comfortably above these gauges, and the 21-day SMA at $4,940.96 offers immediate dynamic support. The 14-day Relative Strength Index stands at 57.99 (neutral-to-bullish), easing from recent highs yet remaining above the 50 line.

Measured from the $5,597.89 high to the $4,401.99 low, the 61.8% retracement at $5,141.05 acts as nearby resistance, with the 78.6% retracement at $5,341.96 capping the next upside zone. A sustained break above the former could target the latter, while failure to advance would shift focus back to the rising 21-day SMA as the first area of support and keep the recovery contained within the broader retracement barrier.

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

Gold FAQs

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

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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