Gold moved above $4,100\/oz after weaker US jobs data and falling energy prices reduced the perceived urgency for the Federal Reserve to tighten policy, including lower odds of a 2026 rate rise. TD Securities expects the metal to form a higher trading range following a push through resistance between $4,050\/oz and $4,126\/oz. The bank sees spot prices trending towards $4,280\/oz in the near term.<\/p>\n
TD Securities places key support at $3,900\/oz and judges a sustained break below that level unlikely while an early Fed funds hike remains off the table. Further out, it retains a $5,300\/oz target but flags oil-driven inflation risks and the possibility of higher interest rates as factors that could delay that move until next year, alongside concerns that oil prices may rebound given low and declining global inventories.<\/p>\n
With the market now digesting the idea that the Federal Reserve will remain on hold, we see gold establishing a new, higher trading range. The metal has cleared key resistance and appears set for a move toward the $4,280\/oz level in the coming weeks. Strong support is expected to hold firm near $3,900\/oz, creating a well-defined playground for traders.<\/p>\n
This view is strengthened by this morning\u2019s Non-Farm Payrolls report, which showed the U.S. added only 145,000 jobs in June, well below expectations. Following this data, the CME FedWatch Tool shows that futures markets are pricing in less than a 15% chance of a rate hike by year-end. This lack of urgency from the Fed should keep a strong bid under gold.<\/p>\n
For derivative traders, we feel a good strategy is to use bull call spreads to target the move toward $4,280\/oz. One could buy the August $4,150 strike call and sell the August $4,280 strike call against it. This structure positions for upside while defining risk and lowering the total cost of the trade.<\/p>\n
Given our high conviction that the $3,900\/oz support level will hold, selling cash-secured puts with a strike price around or just below this level also looks attractive. For example, selling the August $3,880 puts would allow traders to collect premium, benefiting from time decay and the low probability of a sharp breakdown. This is a compelling way to generate income while waiting for the next leg up.<\/p>\n
We must remain cautious, as the bigger rally appears to be a story for next year. The latest CPI data showed core inflation remains stubbornly elevated at 3.4%, and despite a recent dip in WTI crude to $88\/barrel, EIA data shows global inventories are still 10% below their five-year average. These lingering inflation risks are what will likely keep gold from breaking out decisively above our near-term target.<\/p>\n
This situation feels similar to the 2023-2024 period, where gold consolidated for months as traders waited for definitive proof that the Fed\u2019s hiking cycle was over. Once that pivot became clear, the metal began its next major rally. We see a similar pattern forming now, making range-trading strategies the most sensible approach for the next several weeks.<\/p>\n\n\n\n