In the very short-term it is likely that the gold price may struggle around the $3500 mark, just as it did in April. As long as the mid-August low at $3311.56 isn’t being slipped through, the medium-term uptrend is deemed to stay intact.
The combination of fundamental drivers and technical momentum creates conditions where gold could continue advancing if the supportive factors remain in place.
Key economic data could determine direction
Friday’s non-farm payrolls (NFPs) report now looms as the key test for the gold market. A weaker-than-expected jobs number could cement expectations of a deeper rate cut cycle, providing fresh fuel for bullion’s advance.
Conversely, any upside surprise in employment data might trigger a temporary pullback, though with momentum now firmly behind gold, dips are likely to be viewed as opportunities rather than turning points.
The employment data will be crucial for determining whether the Fed follows through on market expectations or whether economic resilience might delay or reduce the scope of monetary policy easing.
Gold’s sensitivity to economic data highlights how closely the precious metal’s performance is tied to monetary policy expectations and broader economic conditions.
Global monetary policy trends support outlook
Beyond Fed policy, central bank actions worldwide are creating a supportive environment for gold investment through coordinated monetary easing and currency debasement concerns.
Many central banks have been net buyers of gold in recent years, especially that of China, adding to official reserves as part of diversification strategies away from US dollar-dominated holdings.
This institutional demand provides a structural support level for gold prices, complementing the investment demand driven by monetary policy expectations and safe-haven seeking.
The combination of official sector buying and investment demand creates multiple sources of support that could sustain higher gold prices even if some individual factors moderate.