Gold price gains on weak US jobs data and rising rate cut expectations

US jobs data fell short of expectations, with May's ADP report showing just 37,000 new jobs. The services sector also contracted, adding to concerns about economic weakness. US Treasury yields dropped as markets priced in a possible Fed rate cut by September. Political pressure and growing fiscal deficits add to uncertainty. At the same time, rising geopolitical risks and trade tensions support demand for gold. Gold prices gained on the back of this sentiment but now face resistance near $3,385. Traders remain cautious, watching for a clear breakout before making strong moves.

Weak US jobs report and Fed rate cut bets boost Gold prices

The latest US macroeconomic data presents a conflicting picture. ADP employment figures came in far below expectations, showing just 37,000 jobs added in May — the weakest print since March 2023. This soft labor data raises concerns about the health of the job market. The ISM Services PMI unexpectedly dropped below the 50-mark, signaling contraction in the US services sector for the first time in nearly a year.

Meanwhile, US Treasury yields have declined. The two-year and ten-year yields fell to their lowest levels since early May, reflecting rising market expectations of a Fed rate cut, potentially as early as September. Political pressure, as former President Donald Trump has urged the Fed to lower rates amid rising fiscal challenges, reinforces this.

Rising fiscal deficits, driven by Trump's tax and spending proposals, could also put further pressure on the USD. Fresh tariffs on steel and aluminum imports have reignited fears of a trade war between the US and China. These concerns are growing ahead of a critical call between Trump and President Xi Jinping.

The geopolitical landscape remains fragile. Trump’s talks with Russian President Putin about Ukraine, ongoing violence in Gaza, and a recent US veto of a UN ceasefire resolution all add to investor anxiety. Despite near-term USD strength, these factors support gold as a hedge against global uncertainty.

Bullish patterns and key resistance at $3,385

The gold chart below shows an Ascending Broadening Wedge that developed from early 2025 to April. This pattern often signals increasing volatility and the potential for a decisive breakout or breakdown. This was followed by a Descending Broadening Wedge, which indicates a bullish reversal once the price breaks above resistance.

Recently, gold broke out of the descending wedge, pointing to renewed upside momentum. However, the price is now consolidating just below the $3,385 resistance level — a multi-week high that has triggered fresh selling pressure. This zone has become a key short-term barrier, as traders remain uncertain about the next major move.

Strong support is visible in the $3,250–$3,260 range, marking an important demand area. Additionally, a symmetrical triangle pattern appears to be forming, suggesting that price action is tightening and could break out in either direction. The overall volume and structure indicate that bulls are cautious, waiting for stronger fundamental signals. If gold stays above the wedge breakout, a move toward $3,420 remains possible. Otherwise, a drop below $3,350 could lead to a decline toward the rising trend line near $3,200.

Conclusion

Gold price attracts fresh sellers near the $3,385 mark, paring back gains from earlier in the week as the US Dollar recovers slightly. Still, broader geopolitical tensions, weak US macroeconomic data, and dovish Fed expectations offer a supportive backdrop for the yellow metal. While technical indicators hint at potential bullish continuation, the near-term bias remains cautious ahead of key political and economic events. Traders should remain alert for any breakout confirmation before positioning aggressively.

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