Gold Price Falls as XAU/USD Tests $3,322 Amid Jobs Beat and Fed Delay

XAU/USD Declines Toward $3,326 as Fed Cuts Fade, Jobs Surprise, and Real Yields Bite

The gold market has been hit with a fresh wave of downside volatility, as XAU/USD dropped as low as $3,326.35 intraday after a stronger-than-expected U.S. Nonfarm Payrolls report completely redefined July rate cut expectations. The yellow metal erased nearly all of its two-day gains, slumping 0.9% in spot and 0.7% in futures to $3,336.90, as Treasury yields and the U.S. dollar surged in parallel.

Market expectations going into the data were for a tepid 110K jobs increase, but the headline came in at 147K, sparking a risk-on surge across stock index futures and pressuring haven assets. Simultaneously, the unemployment rate fell to 4.1% from 4.2%, undermining the case for imminent policy easing.

Rate traders slashed their bets. The CME FedWatch Tool showed July cut odds collapsing from 25.3% before the data to just 4.7%, with September now barely holding on to a 53 basis point cut consensus by year-end — down from 66bps just days earlier.

This recalibration in forward rates placed upward pressure on real yields, compressing the fundamental appeal of gold, which — being non-yielding — performs best when real interest rates fall. Now that those dynamics have reversed sharply, the bullion bid has evaporated in the short term.

Technical Breakdown: $3,350 Breached as XAU/USD Struggles With RSI Neutrality and SMA Ceilings

From a technical standpoint, gold is facing a precarious stall below its 20-day SMA, which sits near $3,350, and the key 78.6% Fibonacci retracement of the April high-low range at $3,372. That area has acted as firm overhead resistance, with bulls failing to generate any breakout conviction even during the preceding short-term rally.

RSI on the daily timeframe is flattening around 50, reflecting indecision and transition. This is a critical moment for trend traders, who now see two structural levels defining short-term sentiment: the 50-day SMA near $3,322, which if lost, could open a run toward the psychological $3,300, followed by major downside at $3,245, then $3,200.

There is also the ascending triangle formation that remains intact on the broader daily chart. Support from that structure rests near $3,330, while the horizontal resistance ceiling of the triangle stands at $3,500. A decisive break above that would unlock $3,550 and $3,600 targets — but for now, the setup has stalled.

Gold Fundamentals Shift as Rate Cut Odds Collapse and Trump Trade Tensions Reignite

Beyond the technicals, fundamental tailwinds for gold have weakened. Traders were initially betting on July as a potential launch point for a Fed easing cycle — especially after ADP private payrolls missed estimates badly with 33K jobs lost, against an expected +95K. But Friday’s robust NFP completely rewrote that narrative.

Now, Powell has breathing room. The U.S. labor market remains resilient enough to justify a “wait and see” stance. Comments made at the ECB forum confirm this. The Fed Chair pointed directly to the tariff-driven inflation spike and acknowledged that “we went on hold when we saw the size of the tariffs.” That puts the central bank’s hands in its pockets for the summer, which is negative for gold in the near term.

Meanwhile, trade tensions are flaring again. Trump’s July 9 tariff deadline is fast approaching. Although a last-minute deal with Vietnam was secured, broader negotiations with India and Japan remain unresolved. Markets remain jittery. The House of Representatives also advanced Trump’s $3.4 trillion tax and spending bill, which could expand U.S. deficits and introduce longer-term dollar risk — a potential medium-term tailwind for gold.

Still, in the short term, dollar strength dominates. A 1.1% rise in DXY post-NFP puts downward force on gold. U.S. yields are up across the curve, and combined with stronger equities and lower Fed cut probabilities, the entire macro setup leans risk-on, not risk-off.

Institutional Flows and Political Turmoil Support Medium-Term Gold Bid

Despite near-term weakness, institutional sentiment toward gold remains structurally positive. Concerns over U.S. fiscal sustainability, now magnified by Trump’s aggressive spending blueprint, continue to push central banks and sovereign investors toward gold accumulation.

Julius Baer’s analysts noted that as U.S. indebtedness rises, long-term gold demand from sovereign buyers is likely to intensify. With global inflation pressures remaining persistent due to de-globalization and energy fragmentation, gold’s role as a hedge remains critical.

Additionally, political stress is increasing. Trump’s attacks on Fed independence, including a Truth Social post calling for Powell’s resignation, inject risk into forward monetary policy credibility. Should Powell be removed or weakened, the Fed’s neutrality could come into question — a scenario that typically supports gold.

XAU/USD Market Structure: Key Support, Resistance, and Volatility Zones

Current price action shows XAU/USD trading just above $3,340, caught between the 20-day EMA and key structural support at $3,330–$3,322. Loss of this zone would expose gold to a slide toward $3,300, and then $3,245, which aligns with May’s floor.

To the upside, bulls must reclaim $3,365 first — a recent local high — and then push through $3,400 with sustained momentum. From there, the breakout target stands at $3,435–$3,440, which could negate the current bearish tilt.

The triangle structure still gives bulls room to hold the uptrend, but failure to defend $3,322 would break the pattern and potentially target $3,121, the May 15 low.

XAU/USD Verdict: Macro Weakness Near-Term, Medium-Term Bid Intact — Hold

Gold (XAU/USD) remains vulnerable in the short term as U.S. employment resilience, rebounding Treasury yields, and surging dollar strength strip the metal of its immediate upside momentum. The loss of July cut expectations removes a key tailwind.

Technically, gold is in a consolidation band with downside pressure mounting unless bulls reclaim the $3,365 zone. Volatility remains elevated due to political tensions, tariff deadlines, and central bank credibility issues.

While the near-term momentum is Bearish, the broader structural bid remains intact due to long-term debt concerns, geopolitical stress, and institutional diversification flows.

Final rating on XAU/USD: Hold. Wait for deeper pullbacks below $3,300 or a confirmed breakout above $3,400 before re-engaging. Medium-term bias remains cautiously constructive.

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