Gold (XAU/USD) rose to about $4,255 in early Asian trade on Thursday, posting its biggest daily jump since February as expectations of a route reopening through the Strait of Hormuz cooled energy-led inflation fears and, by extension, reduced the perceived need for further Federal Reserve tightening. Separately, Iran’s Foreign Ministry said a deal with Oman is being “finalised”, while warning the US and Israel still pose risks to shipping in the waterway. Markets are also focused on Friday’s US July jobs data, where economists forecast Nonfarm Payrolls of 80,000 alongside an Unemployment Rate holding at 4.2%, as a stronger print could lift the dollar and pressure USD-priced commodities.
Gold’s move was reinforced as US Treasury yields fell across the curve, with lower oil prices easing inflation concerns. On the charts, XAU/USD has reclaimed the 20-day simple moving average within the Bollinger Bands, while the Relative Strength Index (14) stands at 60.95, indicating firm momentum without signalling overbought conditions. Resistance remains around the 100-day SMA near $4,400; support levels are seen near $4,185, then about $4,070, with a deeper fallback risk towards roughly $3,950. Central banks added 1,136 tonnes of gold worth around $70 billion in 2022, the highest annual purchase on record.
Gold Volatility and Macro Drivers
We suggest derivative traders prepare for heightened volatility in gold options and futures as XAU/USD hovers near its recent high of $4,255. The potential US-Iran deal regarding the Strait of Hormuz has significantly eased energy-driven inflation fears, pushing US 10-year Treasury yields down. This macroeconomic shift reduces the likelihood of further Federal Reserve rate hikes, which historically serves as a strong bullish driver for non-yielding gold.
Upcoming US Jobs Data and Trading Strategies
We must closely watch tomorrow’s US Nonfarm Payrolls release for July, where a consensus estimate of 80,000 new jobs and a steady 4.2% unemployment rate will dictate the next trend. Historically, weak job growth has triggered massive gold rallies, similar to the labor market cool-downs in late 2024 and early 2025 that helped propel the metal toward its current record territory. A weaker-than-expected jobs print tomorrow could quickly push the yellow metal past its immediate technical barriers.
From a technical standpoint, we recommend traders utilize defined-risk strategies, such as bull call spreads, to target a breakout above the 100-day moving average near $4,400. If a stronger jobs report temporarily boosts the US dollar, we can look to buy the dip near the solid support level of $4,185. However, we should place strict stop-losses just below the 20-day moving average at $4,070 to protect against any sudden collapse in the geopolitical peace talks.
