Gold holds near two-week high: can weak jobs data lift prices more?

Gold was little changed on Friday, holding near a two-week high as investors awaited US labour-market data that could offer the clearest signal yet on the Federal Reserve’s policy path.

A softer dollar and lower oil prices helped limit downside, while persistent tensions in the Middle East continued to support haven demand.

The metal was also on course for a third straight weekly gain, reflecting a market still caught between two competing forces: expectations for US interest rates and demand for safety as geopolitical risks remain elevated.

Traders are now focused on April’s non-farm payrolls report, which could reshape expectations for when the Fed may begin easing policy.

Jobs data in focus

Markets expect US payrolls to rise by about 62,000, down sharply from 178,000 in March, while the unemployment rate is seen holding at 4.3%.

The figures matter because they will feed directly into the debate over whether the US economy is cooling enough for the Fed to consider cutting rates later this year.

For gold, the policy implications are straightforward.

Higher interest rates typically weigh on bullion because the metal offers no yield, making it less attractive when returns on cash and bonds are elevated.

By contrast, weaker-than-expected labour data could strengthen the case for rate cuts, pressure the dollar and Treasury yields, and offer fresh support to gold prices.

A stronger report, however, could have the opposite effect.

If payrolls surprise to the upside, investors may push back expectations for Fed easing, lifting the dollar and capping gains in bullion.

That has left the market in a holding pattern, with traders reluctant to chase prices higher before the data.

Dollar, oil and geopolitics

The dollar’s softer tone has been an important support for gold this week.

Because bullion is priced in the US currency, a weaker dollar makes it cheaper for buyers using other currencies and can help sustain demand even when broader risk appetite improves.

Oil prices, meanwhile, eased from recent highs, reducing some of the immediate inflation anxiety that had been building in global markets.

Lower energy prices can temper expectations of renewed price pressures, which in turn may limit the urgency for investors to add to gold as an inflation hedge.

Even so, geopolitical risks remain firmly in view.

Fresh tensions around the Strait of Hormuz have kept markets alert to the possibility of further disruption in a key energy corridor.

That backdrop has prevented any deep pullback in gold, with haven buying continuing to offset pressure from shifting rate expectations.

Levels to watch

From a technical perspective, gold remains above its 20-day simple moving average and the middle Bollinger band near $4,695, suggesting the near-term structure is still constructive.

Momentum appears moderately positive, with the relative strength index near 52.

At the same time, the average directional index sits around 20, below the 25 level often associated with a stronger trend.

That suggests the current move higher remains intact, but lacks strong conviction. Initial resistance is seen near $4,882, followed by the psychologically important $5,000 level.

On the downside, support is clustered around $4,695 and then $4,509, with a more important floor near $4,335.

For now, gold looks set to take its next clear direction from the US payrolls report and what it implies for the Fed, the dollar and real yields.