Key Takeaways:
Gold is holding near $4,300 an ounce as Friday's US payrolls report decides whether the metal targets the 200-day moving average or retests the 50-day.
"Gold has room to reach $4,500 this summer, with $4,800 to $4,900 possible if it clears resistance near $4,490," Florian Grummes, founder and managing director of Midas Touch Consulting, told Kitco News. The January record stands at $5,589.38.
Spot gold (XAU/USD) traded at $4,258.66, up 0.27 percent, at 11:25 GMT Thursday after touching $4,304.31 overnight, its strongest level in seven weeks. The breakout came as September rate-hike odds fell to 55 percent from 67 percent two days earlier, according to CME FedWatch data, while crude dropped on Iran-Oman talks over a Hormuz shipping route. The 10-year Treasury yield eased to 4.6208 percent, the 30-year to 5.1711 percent and the two-year ticked higher to 4.1977 percent.
Friday's nonfarm payrolls report, expected to show 80,000 jobs added in July after 57,000 in June with unemployment steady at 4.2 percent, is the deciding test. A strong print with firm wages rebuilds the case for a September hike and pressures gold toward the 50-day moving average at $4,157.25; a soft reading clears the path toward the 200-day at $4,491.40.
The trend turned up Wednesday on a breakout above the 50-day moving average at $4,157.25 and a short-term retracement zone at $4,162.36 to $4,214.34, according to swing-chart analysis. A series of higher bottoms at $3,942.10, $3,959.80 and $3,996.06 built an elongated support base over the past month, shifting the pattern from lower-bottoms to higher-bottoms.
Buying strength means taking out the intraday high at $4,304.31 and playing for a surge into the next resistance cluster at $4,416.82 and $4,491.40, the latter the 200-day moving average. If sellers re-emerge, a pullback targets the minor retracement zone at $4,214.34 to $4,162.36 and the 50-day at $4,157.25, with a deeper floor at $4,123.21 to $4,080.46.
The rally rests on two pillars that could crack. Iran and Oman are discussing coordinates for a Hormuz route, and Washington says progress is being made on restoring commercial shipping, but crude can reverse on any sign the arrangement is falling apart. Brent for October delivery gained over 4.5 percent Thursday yet remains nearly $20 a barrel below the July 23 peak above $100, according to exchange data.
The Federal Reserve is publicly split. Kashkari said policymakers should begin raising rates as more data arrives, pointing to strong corporate earnings and a labor market that has not cracked. Daly supported the hold and wants more evidence on inflation before the committee moves. The ADP report Wednesday showed private payroll growth slowing to 44,000 in July, below the 65,000 consensus, reinforcing TD Securities' view of moderating job gains.
Central banks added a record 289 metric tons of gold in the second quarter, according to World Gold Council data, as Asian buyers diversified reserves away from the dollar. Spot gold is up about 6 percent this week, its best weekly gain since January.
This article is for informational purposes only and does not constitute investment advice.
