Gold has once again become the focal point of global markets, and this is no coincidence. As gold breaks through the key resistance level of $3,500, its fundamentals are undergoing an adjustment that may determine its next major trend.
From the Federal Reserve’s policy stance to labour market dynamics, from political tensions to geopolitical flashpoints, catalysts demanding investors’ and traders’ attention abound.
Key data to watch this week:
Investors and traders monitoring gold should closely scrutinise this week’s upcoming US economic releases, as each data point could influence the Fed’s next moves and gold’s trajectory.
Tuesday: ISM Manufacturing PMI: Weak readings would highlight slowing industrial activity, bolstering arguments for the Fed to ease monetary policy and supporting gold prices.
Conversely, stronger-than-expected figures would signal economic resilience, potentially dampening rate cut expectations and limiting gold’s near-term upside.
Wednesday: JOLTS Job Openings: A decline in openings would confirm weak labour demand, suggesting the Fed may need to act sooner to support employment.
This would be dovish for policy and favourable for gold. However, an unexpected rise would signal persistent labour shortages, easing pressure on the Fed and weighing on gold.
Thursday: ADP Nonfarm Employment, Initial Jobless Claims, ISM Services PMI: These data collectively provide a near-real-time snapshot of labour and services sectors.
Weak ADP employment or rising initial jobless claims could signal cooling job growth momentum, strengthening gold prices as Fed easing becomes imperative.
Weak ISM services data would heighten recession risks, while broadly robust figures could delay policy action and trigger gold price volatility.
Friday: Non-farm payrolls: This week’s most critical data. Weak employment, rising unemployment, or slowing wage growth could almost certainly trigger a September rate cut, potentially propelling gold above $3,550.
However, robust employment figures might temporarily restore confidence in US economic growth, thereby capping gold’s upside.
The author believes: Gold’s outlook is becoming increasingly clear. Should forthcoming data confirm labour market weakness and slowing economic growth, the Federal Reserve will have no choice but to ease monetary policy. This would depress real yields and provide a powerful boost to gold prices.
Political instability and persistent geopolitical risks compound this monetary backdrop, both offering an additional layer of support for gold prices.
Spot gold was quoted at US$3,480.15 per ounce at 19:30 Hong Kong time.
Author: Martin (Analyst) 02-09-2025
#The above represents solely the author’s personal views and does not reflect the company’s position.
#Strategic recommendations are for reference only. Market entry carries risks; investment requires caution.