Date: 5th June 2026.
Gold at a Crossroads: All Eyes on NFP Friday.
As May’s NFP Change and the unemployment rate approaches for the US, Gold prices again take a dip. The price of the safe-haven asset has been forming a descending triangle pattern, indicating pressure on demand, but also forming a clear support level. The price movement of Gold and its outlook will particularly depend on the upcoming employment data.
NFP Friday - What To Expect
Market experts are expecting May’s NFP Employment Change to come in at 85,000, which is 30,000 lower than the previous month. Even though the market is expecting a lower employment change, a figure of 85,000 is still higher than the six-month average of 74,000. Traders can keep up to date with the latest releases with HFM's Calendar.
The market also continues to expect the US unemployment rate to remain at 4.3% and for the average salary growth to be 0.3%. If the NFP reads higher than expectations, markets will expect the Dollar to potentially rise and Gold to simultaneously fall. Pressure on Gold will particularly rise if NFP comes in higher while the Unemployment Rate drops to 4.2%. However, traders should note that this would all depend on the data released.
So far, this week’s employment data seems skewed toward an upside surprise or in line with current market expectations. The reason for this is that the recent ADP Employment figures beat expectations and rose to a 13-month high. In addition to this, the JOLTS Job Openings also came in considerably higher than expectations. However, yesterday’s Weekly Unemployment Claims rose to a four-month high of 225,000.
The descending triangle pattern seen on Gold is also known to be a potential indication of downward price movement. Therefore, technical analysis will also be in line with the fundamentals if the US employment data is positive. However, a lower employment change and a higher unemployment rate can have the opposite effect.
Gold Holds Neutral, But What Signals Are Emerging?
On NFP Friday, the price of Gold fell during the Asian session by 1.09% to the $4,426.65 support level before rebounding at the London open. Nonetheless, the price continues to maintain lower highs and trades lower as the NFP release approaches.
The US Dollar Index is also declining this morning, which can provide some support for Gold. However, a key factor will also be bond yields, which the US is struggling to keep below 4.50%. US bond yields in the last two weeks of May fell from their recent highs, but in June they have not fallen further. In June, bond yields have continued to trade sideways. How bond yields react after the NFP release will particularly impact Gold. If bond yields rise, gold may come under pressure, while lower bond yields can support the price.
Gold trading remains active, although speculative positions continue to decline. This suggests that gold is moving away from its risk-driven investment appeal and returning to its traditional role as a safe-haven asset.
According to the latest CFTC report, net speculative gold positions fell from 159.8 thousand to 154.3 thousand last week. However, investors still hold large buy positions. Buyers held 124.5 thousand positions, while sellers held 27.6 thousand. Last week, buyers slightly increased their positions, while sellers reduced theirs.
Furthermore, what remains key for Gold is the possibility of an interest rate hike declining. Over the past 24 hours the possibility of a rate hike has remained at 46%, but investors will be watching how this changes after the NFP release.
HFM - Gold 1-Hour Chart
The price of Gold continues to remain below the key moving averages on the 1-hour and 2-hour charts. However, the price trades at 48.74 on the RSI, which is a clear neutral indication, meaning the price is not witnessing a clear sell signal. However, if the price declines below $4,442.15, Gold may see sell signals strengthen. If the price rises above $4,484.80, buy signals can potentially materialise.
However, indications provided by technical analysis will also need to be in line with the NFP release, the US Dollar reaction, as well as the bond market.
Key Takeaways:
Gold remains under pressure ahead of the NFP release, with the price forming a descending triangle pattern.
A stronger-than-expected NFP reading could support the US Dollar and pressure Gold, especially if unemployment falls and bond yields rise.
A weaker NFP figure or higher unemployment rate could support Gold, particularly if the Dollar and US bond yields move lower after the release.
Gold’s technical signal remains neutral for now. A move below $4,442.15 could strengthen sell signals, while a move above $4,484.80 could support buy signals.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Michalis Efthymiou
HFMarkets
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