Gold is back on the bid early Friday, regaining traction above $4,700 as markets remain hopeful for a potential US-Iran peace deal in the countdown to the US Nonfarm Payrolls (NFP) release.
Gold’s fate hinges on critical event risks ahead
Despite Thursday’s hostilities, reassurances from the United States (US) and Iran toward a continued ceasefire bring a sigh of relief to Asian markets and curb the renewed haven demand for the US Dollar (USD). This, in turn, offers a fresh impetus to Gold buyers.
Both the warring nations traded strikes in the Strait of Hormuz on Thursday, challenging a fragile month-long ceasefire.
However, later that day, US President Donald Trump told ABC News that retaliatory strikes against Iranian targets after Iran attacks are just a ‘love tap’, adding that “the ceasefire is underway, it’s in effect.”
At the same time, Iran’s Press TV reported that the situation on Iranian islands and coastal cities near the Strait of Hormuz returned to normal after Tehran’s top joint military command said the US breached the ceasefire by attacking an Iranian oil tanker and another vessel near the Strait.
That being said, markets remain optimistic about a likely peace deal as Iran reviews Washington’s proposal to end the war.
Beyond geopolitics, the next decisive move in Gold could be sponsored by the US jobs data, including the all-important NFP print. The US Federal Reserve (Fed) is struggling to balance its dual mandate of maintaining price stability and full employment.
Economists are expecting the headline NFP to increase by 62,000 in April after recording a blockbuster 178,000 job gain in March. The Unemployment Rate is likely to hold steady at 4.3% in the same period.
The employment data will be closely scrutinized to know “whether the US economy remains resilient enough to keep the Fed’s monetary policy on hold, or whether a softening labor market could revive the case for rate cuts,” per Reuters.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,713.59. The metal is attempting to stabilize above the short-term 21-day simple moving average (SMA) at $4,697.84 and the reclaimed downward trend-line around $4,569, which together suggest a modestly constructive undertone, especially after Gold closed Wednesday above the descending trendline resistance, then near $4,595, confirming an upside break from a falling wedge pattern.
Momentum is neutral to mildly positive, with the Relative Strength Index (14) hovering near 52, hinting that directional conviction is still limited while price consolidates between underlying support and nearby moving-average resistance.
On the topside, immediate resistance is clustered in the $4,778–4,780 region, where the 100-day SMA at $4,778.05 and the 50-day SMA at $4,780.21 converge, and a daily close above this band would be needed to reopen the way toward higher highs. On the downside, initial support is seen at the recent pivot near $4,713, followed by the 21-day SMA at $4,697.84; a break below there would expose the former trend-line barrier turned support around $4,569, while only a deeper slide toward the distant 200-day SMA near $4,314 would materially damage the medium-term bullish structure.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months’ reviews and the Unemployment Rate are as relevant as the headline figure. The market’s reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
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Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation.
A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work.
The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower.
NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa.
Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold.
Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components.
At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary.
The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
