Insights 
VT 
Gold prices fell 0.80% amid a stronger US Dollar following a robust US Nonfarm Payrolls report, casting doubt on prospects for a Federal Reserve rate cut. At present, XAU/USD stands at $3,332, dipping from a high of $3,365 on the same day.
The US employment report for June surpassed expectations, also beating May’s numbers. Unemployment dropped, nearing 4%, indicating strength in the labour market, contrasting with the previous ADP National Employment Change report.
Dollar And Treasury Yields Surge
The Dollar gained, supported by rising US Treasury yields, with futures suggesting two rate cuts by 2025. This contrasts with pricing at the start of July, which anticipated 65 basis points of easing by the year’s end.
US Treasury Secretary Scott Bessent mentioned pending trade deals, following the Vietnam agreement. Additionally, discussions continue in the US House over Trump’s “One Big Beautiful Bill,” proposing a $3.3 trillion debt increase over ten years.
Gold remains pressured as US Treasury yields and the Dollar climb, with the US 10-year yield up five basis points to 4.334%. Positive data from ISM Services PMI and initial jobless claims further support the Dollar, affecting gold’s outlook.
Globally, in May, central banks purchased 20 tonnes of gold, led by Kazakhstan and Turkey. Gold may consolidate, with traders needing to breach the $3,400 mark to target the $3,500 high, while a fall below $3,300 could trigger further decline.
Labor Market And Economic Data
With Friday’s payroll data coming in hotter than forecasts, the immediate reaction was clear: the Dollar strengthened, forcing gold to retreat. A stronger labour market makes it tougher for the Federal Reserve to justify any swift monetary easing. The June figures were especially compelling, as the drop in unemployment and the beat over May’s data added real weight to expectations of ongoing economic resilience in the United States.
We’ve observed that US Treasury yields responded accordingly, pushing higher on the back of the report. The 10-year yield ticked up by five basis points, moving towards 4.334%, which in effect lifts the opportunity cost of holding non-yielding assets like gold. As Treasury instruments become more attractive, interest in gold naturally dims.
Fed funds futures trading mirrors this shift. Back in early July, markets had priced in over half a percentage point’s worth of cuts for this year. Since then, that expectation has rotated markedly. We’re now looking at traders adjusting forward guidance to only two modest reductions by the end of 2025. That pivot has been swift and notable—what looked like a clear path to easier policy is now less assured.
Further support for bond yields and the Dollar came from upbeat services sector data and solid initial jobless claims. Both sets of figures suggest the underlying economic activity remains steady, which once again makes it more difficult for Fed officials to lean towards early rate relief.
On the global side, central bank activity in the bullion space remains cautious. The net additions in May were led by Kazakhstan and Turkey, but the modest total of 20 tonnes doesn’t suggest robust institutional demand. It tells us demand is stable but hardly aggressive, reflecting a wait-and-see attitude possibly linked to policy clarity from major Western countries.
Technical levels haven’t shifted much. The bulls need traction above $3,400 to trigger broader momentum towards $3,500. Without that break, there’s a risk of sideways chop or potential downside if $3,300 fails to hold. That zone becomes particularly sensitive in the coming days. We note that volumes have thinned since the US economic data release, and that does introduce some risk of exaggerated moves.
As Bessent continues to speak on trade initiatives following the recent Vietnam deal, an eye toward macro policy remains essential. The longer-term implications of debt expansion proposals like the one floating through the House—tentatively dubbed “One Big Beautiful Bill”—could have downstream effects on fiscal expectations and, by extension, interest rates.
Those managing leveraged exposures in futures or options tied to XAU/USD may want to reassess convexity and Vega exposure, particularly if the Federal Reserve members shift tone in upcoming public statements. Historically, gold and interest rate expectations remain closely aligned, and recent data has highlighted just how sensitive the current price action is to shifts in consensus around US economic resilience.
The following sessions, especially those with more labour and inflation data, could bring some volatility back if surprises edge out consensus narratives. For now, the tug-of-war between inflation control and employment strength continues to dictate directional bias.
