Gold hovered above $4,400 for a second day, holding above Friday’s swing low after stronger US labour data reinforced the dollar and weighed on the non-yielding metal. August Nonfarm Payrolls rose by 162K versus forecasts of 56K, while the unemployment rate stayed at 4.1% and annual average hourly earnings eased to 3.1% from 3.2%. Firmer energy prices have added to inflation concerns and supported expectations of a Federal Reserve rate hike later this month, even as Fed Governor Christopher Waller indicated he could favour keeping rates unchanged if incoming data showed inflation pressures cooling. Markets now await US Producer Price Index data on Thursday and US Consumer Price Index figures on Friday for further policy cues.
Geopolitical risk remains elevated after US forces struck three Iranian oil tankers on Saturday and Iran’s Islamic Revolutionary Guard Corps said it targeted six vessels in response, raising concern over shipping in the Strait of Hormuz and underpinning oil prices. Technically, XAU/USD remains above the 200-day EMA near $4,318 and the 50% retracement around $4,324; MACD is negative and RSI is near 51. Resistance sits near $4,411, then $4,519 and $4,693, while support levels include $4,324, $4,318, $4,237 and $4,113.
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Market Caution and Economic Data Ahead
As we navigate the opening weeks of September 2026, we advise gold derivative traders to exercise caution and avoid aggressive bullish positions despite gold holding above the crucial $4,400 level. The surprisingly strong August nonfarm payrolls of 162K—well above the forecasted 56K—has significantly bolstered expectations for a Federal Reserve rate hike later this month. With the U.S. dollar strengthening on these hawkish bets, gold’s immediate upside remains heavily capped.
We must closely monitor the upcoming U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) releases on Thursday and Friday. These crucial inflation gauges will clarify whether the Fed will indeed press ahead with tightening or keep rates steady. Historically, unexpected CPI data has triggered sharp intraday swings in precious metals, meaning traders should utilize tight stop-losses or opt for option straddles to manage risk.
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Geopolitical Risks and Tactical Trading Strategies
Adding to the market tension, the escalating military conflict in the Strait of Hormuz has recently pushed Brent crude oil futures up by over 4% to hover near $88 a barrel. Historically, disruptions in this strategic waterway, which handles roughly 20% of global petroleum liquid consumption, spike energy-led inflation fears and drive safe-haven flows to the U.S. dollar. This geopolitical backdrop keeps the risk premium active but ultimately favors the greenback over non-yielding gold.
For tactical positioning, we recommend that derivative traders focus on the immediate resistance level at $4,411 and the solid support floor near $4,324. A failure to break above $4,411 could open the door for short-term put options targeting the 200-day Exponential Moving Average at $4,318. Conversely, a clean break above $4,411 would signal a reversal of the current negative bias, making long call options targeting $4,519 highly attractive.
