Gold (XAU/USD) traded below $4,500 in Friday’s Asian session, ending a two-day rise as the US Dollar ticked higher, though it stayed close to the week’s peak set a day earlier. Attention is on the US Nonfarm Payrolls report, which could shape expectations for the Federal Reserve’s policy path as September rate-hike pricing eases. Governor Christopher Waller said on Thursday he leans towards holding rates steady at the September FOMC meeting if upcoming inflation data do not surprise, a backdrop that previously pushed US yields and the Dollar lower and helped bullion rebound from a four-week low.
Oil remained near its highest level since July 24 after renewed US-Iran hostilities and Strait of Hormuz tensions, including Iran targeting US bases in Kuwait and the United Arab Emirates on Thursday, while South Korea is preparing to deploy assets before year-end. Against that backdrop, XAU/USD has stabilised after sliding from around $4,700, its highest since May 14, and is set for modest weekly gains, but it needs traction above $4,500. Technically, price holds above the 200-day SMA on the 4-hour chart and the 38.2% Fibonacci level, with RSI near 56 and MACD above zero; resistance sits at $4,540, $4,609 and around $4,698, while support is at $4,442, $4,381, $4,322 and $4,283.63.
Payroll Data and Trading Strategies
Today’s highly anticipated U.S. Nonfarm Payrolls report is the primary catalyst we need to watch, as it will likely dictate gold’s next directional move. Historically, payroll deviations of more than 50,000 jobs from consensus estimates spark immediate 1.5% to 2% price swings in bullion. We recommend that derivative traders temporarily tighten stop-loss orders or use straddle option strategies to capture this expected volatility without picking a premature direction.
Geopolitical Risks and Technical Outlook
Beyond the jobs data, escalating tensions in the Middle East and the Strait of Hormuz are keeping a strong geopolitical risk premium priced into both oil and safe-haven assets. Historical data shows that military conflicts involving major oil passages can drive gold prices up by 10% to 15% within a few weeks due to inflation fears. For our options portfolios, we should consider buying out-of-the-money call options to hedge against sudden geopolitical spikes that could easily push gold past the $4,500 threshold.
From a technical perspective, gold remains structurally bullish above its 200-day moving average on the four-hour chart, with key support holding firm at $4,442. A sustained daily close above the crucial $4,500 psychological level would signal a green light to build longer-term bullish futures positions targeting $4,609 and $4,698. Conversely, if the dollar strengthens on a hot jobs report, we should look to buy the dips near the $4,381 support level where buying pressure has historically been strong.
