Weaker economic data, including GDP and consumer confidence, adds importance to the NFP report for Federal Reserve interest rate decisions.
Gold (XAU/USD) finds support near 3200, with potential resistance at 3277 and 3300, and possible support at 3236 and 3195.
Market participants are waiting on the from the US which is due later today. The release comes in a week that has seen market sentiment continue to improve on hopes of a US-China trade deal. Data releases this week have not been the best, however, and sentiment has largely been driven by US earnings season and tariff news.
NFP Preview: What to Expect
The US Bureau of Labor Statistics is expected to report a gain of 130,000 jobs in April 2025, a drop from the stronger 228,000 jobs added the month before. The is likely to stay at 4.2%, and average hourly wages are expected to grow 0.3%, matching March’s pace.
The slower job growth suggests the economy is cooling but still adding jobs. This week’s print may be another sign of a cooling economy. This week’s consumer confidence report shows a big risk of reduced consumer spending. Households are struggling with higher prices, worrying about losing jobs, and dealing with declining wealth.
This adds further importance to the jobs data tomorrow and is key for the as it plans future decisions on interest rates, focusing on employment and inflation trends. Market participants predict the Federal Reserve will cut interest rates four times this year, but the cuts are unlikely to begin at this month’s meeting.
Potential Implications for the US Dollar Index (DXY) and Gold
Heading into the NFP release today and the mood is brighter than it could have been. From a data perspective though, it has not been a good one with GDP and the consumer confidence report have added to concerns about the economy.
Even with that though, the reaction of markets proved short lived with the overall sentiment and improving risk appetite overshadowing the data. Now with that in mind, let us take a look at what the potential implications may be for the and depending on the data release.
Source: Table created by Zain Vawda, TradingEconomics, LSEG
Technical Analysis Gold (XAU/USD)
Looking at the Gold chart below, support has been found close to the 3200 support level.
Looking at price action and we can see gold has printed a lower low which means a pullback could be on the cards.
The precious metal has already risen significantly from yesterday’s lows with immediate resistance resting at 3277 and 3300.
A move to the downside, however, may find support at 3236 with a break below opening up a retest of yesterday’s low and support at 3195.
Gold Daily Chart, May 2, 2025
Source: TradingView
Final Thoughts
It will be interesting to see if Gold can sustain its rally given the improving risk appetite. If we look back at the GDP data released this week, the weaker US dollar proved to be short-lived and thus Gold’s rally failed to gain traction. Will we see a repeat today?
As for the Fed, they are still waiting to see how tariff developments may affect inflation. The Fed will be hoping the labor market stays steady for now or this would add another layer of complications for the Central Bank moving forward.
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