After the price of gold soared, it held steady at $3,540! Can non-farmers ignite the engine that rushes towards 3,600?

On Friday (September 5) in the European market, it was difficult for spot gold to continue its moderate intraday rally. Gold prices fluctuated at a high level near $3,550/ounce, as the market chose to stay on the sidelines before the release of the US non-farm payrolls report (NFP), waiting for the next stage of directional market guidance. The market-focused non-farm payrolls report will play a key role in shaping the Federal Reserve's interest rate cut path expectations, which in turn will promote the trend of the dollar and inject new volatility into gold prices.

Interest rate cut expectations + hedging demand are dual-driven, and the weekly price of gold is in sight

The current market consensus that the Federal Reserve will resume its rate-cutting cycle later this month continues to weigh on dollar bulls, providing support for gold prices.

In addition, continued trade policy uncertainty should also limit the downside for safe-haven precious metals.

Despite Thursday's retreat, gold's performance continues to show exceptional strength over a longer time frame. The heavy metal recorded an impressive 2.34% gain this week and is still holding up a stunning 36.24% gain so far this year, underscoring continued interest in the traditional safe-haven asset.

From a technical standpoint, Thursday's decline approached but failed to break through key support levels, indicating that underlying bullish sentiment remains strong.

Despite this, spot gold is still expected to close higher for the third consecutive week and post its best weekly performance in three months.

The market is watching cautiously, waiting for non-agricultural data to set the tone

U.S. ADP data released on Thursday further showed signs of a cooling labor market, strengthening expectations that the Federal Reserve will cut interest rates this month. The automated data processing company reported that private sector employment rose by 54,000 in August, a sharp decrease from the revised 106,000 (original value 104,000) in July and lower than 65,000 expectations.

Initial jobless claims rose to 237,000 in the week to August 30, higher than expected 230,000 and 229,000, according to a separate report from the labour department. The figures masked a strong performance in the ISM services PMI, which rose to 52 in August, up from 50.1 in July.

US President Donald Trump on Thursday formally signed an executive order to implement the reduction in tariffs on Japanese cars and other products announced in July, boosting market sentiment. At the same time, Trump has asked the Supreme Court to immediately hear the tariff appeal case, seeking to overturn an appeals court ruling that most of his tariffs were illegal, perpetuating trade uncertainty.

The market is now focusing on the non-farm payrolls report, which is expected to add 75,000 jobs in August, and the unemployment rate edged up to 4.3% from 4.2%.Any significant deviation from expectations would trigger a repricing of the Fed's rate-cutting path, which in turn would affect the dollar and gold。

New York Fed President William Williams said on Thursday that the Fed must strike a balance between inflation and job market risks. He added that trade and immigration factors are slowing economic activity, with GDP expected to grow by 1.25% to 1.5% this year. If the economy meets expectations, the unemployment rate could rise to 4.5% next year and gradually cut interest rates.

Chicago Fed President John Goolsbee pointed out that the labor market may be worsening and inflation may be picking up. He stressed that interest rates are a better reflection of labor market conditions than raw job growth, and that uncertainty requires staying on the sidelines. But these hawkish remarks failed to provide effective support for the dollar.

Gold bulls refuse to surrender! Behind the daily RSI super hard to suppress

Gold prices rallied overnight near the 23.6% Fibonacci retracement near the 100-day moving average (3,346.89) and $3,300, building on a breakout of months of volatility.

The daily relative strength index (RSI) shows overbought, and the technical landscape continues to favor spot gold bulls.

On the upside, breaking through the $3,560 resistance could challenge the barrier in the $3,578-3,579 area, which hit an all-time peak on Wednesday. If it can break through this area effectively, the follow-up momentum may push the price of gold towards the $3,600 mark (that is, the theoretical target level of the range breakout).

On the downside, any technical pullback is likely to gain support at the 23.6% Fibonacci retracement level, followed by the key defensive line at the psychological level of $3,500. A break below this support could trigger a deeper pullback to $3,440 (the original oscillating range resistance turns to support). An effective break below this level would suggest that the price of gold has established a top, and the short-term trend may turn bearish.

(Daily chart of spot gold, source: Internet)

At 16:38 Beijing time, spot gold was quoted at $3,548.02 per ounce.