Gold Price Forecast: XAU/USD keeps testing 200-day SMA ahead of the key US NFP data
- Gold sellers fight back control heading toward the US Nonfarm Payrolls release.
- The US Dollar Index enters bullish consolidation amid Gulf deadlock, hawkish Fed bets.
- Will Gold defend the key 200-day SMA on US NFP or break lower toward $4,350?
Gold is reversing a part of the previous rebound early Friday, back around the $4,450 level as markets trade with caution amid a deadlock in the Gulf conflict and ahead of the all-important US Nonfarm Payrolls (NFP) data release.
Gold eyes US NFP report for the next major direction
A sense of caution prevails across financial markets, with investors wary of a renewed flare-up in Middle East hostilities, as the US-Iran peace talks remain in limbo.
Meanwhile, the Iran-backed militant group, Hezbollah, rejected a US-brokered ceasefire plan agreed by the Lebanese and Israeli governments, throwing the regional peace negotiations into question.
This came after Israeli Defence Minister Israel Katz said that Israel will continue operations in Lebanon despite a ceasefire.
These lingering tensions offset any conciliatory remarks from US President Donald Trump on reaching a peace deal and reopening the Strait of Hormuz, keeping risk-off flows intact alongside the haven demand for the US Dollar (USD).
The Greenback also continues to draw support from the recent slew of robust US economic data, which has bolstered Federal Reserve (Fed) interest rate hike expectations for this year.
Against this backdrop, the non-yielding and USD-sensitive bright metal, Gold. keeps facing headwinds, reverting to the critical daily support. The next major move in Gold now hinges on the critical NFP event risk.
Economists are expecting the headline NFP to rise by 85,000 in May, compared with an increase of 115,000 in April. The Unemployment Rate is likely to stay unchanged at 4.3% in the same period.
A big beat on the NFP headline could show US economic resilience and double down on hawkish Fed expectations, boding ill for the precious metal. On the other hand, an NFP disappointment could underscore labor market concerns, prompting markets to scale back their bets on a potential Fed rate hike later this year. This could be the breakout scenario for Gold bulls.
Besides the US jobs data, the Mideast developments and the end-of-the-week flows will also remain in play, significantly influencing the Gold trades.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,440.72. The metal holds just above the 200-day Simple Moving Average (SMA) at $4,432.66, but a stack of overhead resistance from the 21-day SMA near $4,551.55, the 50-day SMA at $4,629.55 and the more distant 100-day SMA at $4,796.18 keeps the near-term tone bearish. The Relative Strength Index (14) around 40 reinforces persistent downside pressure rather than a clear recovery.
On the downside, the 200-day SMA at $4,432.66 is the first and only notable support level, and a sustained break beneath it would likely expose deeper losses toward the $4,350 demand area, followed by the $4,300 round level. On the topside, initial resistance emerges at the 21-day SMA around $4,551.55, followed by the 50-day SMA at $4,629.55 and then the 100-day SMA near $4,796.18, levels that bulls would need to reclaim to ease the current bearish bias.
(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.
Read more.Next release: Fri Jun 05, 2026 12:30
Frequency: Monthly
Consensus: 85K
Previous: 115K
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.
Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
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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.
