Gold holds firm near record highs amid dovish Fed signals, weaker jobs data shifts focus to NFP

• Gold pauses after a record high of $3,578.50 as profit-taking and a steady US Dollar weigh on sentiment.
• Easing US Treasury yields and calmer global bond markets help limit downside, keeping safe-haven demand supported.
• The US PMI data were mixed, with the S&P Global Composite slipping to 54.6, while the ISM Services PMI improved to 52.0, supported by stronger new orders but weaker employment.

Gold (XAU/USD) is taking a breather on Thursday after hitting a fresh record high of $3,578.50 on Wednesday, pausing a remarkable seven-day rally. At the time of writing, XAU/USD is trading around $3,548 during the American session, after slipping toward $3,510 earlier in the day, as profit-taking and a steady US Dollar (USD) weigh on sentiment. The move also comes as calm returns to global bond markets after this week’s turmoil, easing some of the safe-haven rush that had fueled bullion’s record run.

The broader rally in Gold remains intact, underpinned by firm expectations that the Federal Reserve (Fed) will lower interest rates in its September 16-17 monetary policy meeting. Lower borrowing costs reduce the opportunity cost of holding non-yielding bullion, while a broadly weaker US Dollar keeps demand supported. At the same time, calmer bond markets, ongoing global trade tensions, and concerns over fiscal credibility in major economies and the Fed’s independence continue to underpin safe-haven demand.

Fresh US labor market data points to mixed signals. The ADP Employment Report showed private payrolls rising by just 54,000 in August, undershooting expectations and marking a sharp slowdown from July’s revised 106,000. Weekly Initial Jobless Claims also edged higher to 237,000, indicating a modest pickup in layoffs. On the brighter side, Q2 Nonfarm Productivity was revised up to 3.3% while Unit Labor Costs eased to 1.0%, suggesting cooling wage pressures. The figures reinforce expectations for a September Fed rate cut, with traders now turning their attention to Friday’s Nonfarm Payrolls (NFP) for confirmation of the labor market trend.

Market movers: DXY holds firm, bond markets calm, Trump’s tariffs under legal fire

• The US Dollar Index (DXY), which measures the Greenback’s value against a basket of six major currencies, is holding firm near 98.40 after retracing part of Wednesday’s losses. The index continues to trade within the narrow range established since early August, as traders digest the latest US economic data.
• Easing US Treasury yields help limit downside in Gold, with the 10-year slipping about 2 bps to 4.19%, the 30-year down nearly 1 bps to 4.89%, and 10-year TIPS easing 3 bps to 1.79%. Softer yields provide a cushion for bullion, keeping Thursday’s mild correction contained.
• The S&P Global Composite Purchasing Managers Index (PMI) slipped to 54.6 from 55.4, but the ISM Services PMI rose to 52.0, beating forecasts of 51.0 and marking an improvement from 50.1 in July. Subcomponents showed new orders accelerating to 56.0, while employment softened to 46.5 and prices paid held elevated at 69.2, suggesting resilient demand but a cooling labor market.
• Global bond markets show signs of stability after a recent surge pushed long-term yields in Japan and the UK to multi-decade highs. A strong debt auction in Tokyo and reassurances from UK policymakers have eased investor anxiety, though underlying fiscal concerns persist. Elevated borrowing costs across major economies continue to raise questions about debt sustainability, keeping Gold supported as investors hedge against policy risk and credit pressures.
• The Trump administration on Wednesday asked the US Supreme Court to overturn a federal appeals court ruling that struck down most of the US president’s global tariffs. Lower courts have argued that the International Emergency Economic Powers Act (IEEPA) does not grant presidents unlimited tariff powers, citing the “major questions” doctrine. At least eight lawsuits are challenging the measures, with the Justice Department seeking a review by September 10 and hearings in November. The tariffs remain in place until the Court delivers its verdict, leaving Trump’s broader economic agenda under legal scrutiny.
• US JOLTS Job Openings fell to 7.18 million in July, the lowest in ten months, signaling softer labor demand. The decline suggests downside risks to employment are rising, reinforcing the case for a 25 basis point Fed rate cut in September. According to the CME FedWatch tool, markets are now fully pricing in nearly 97% odds of a cut at the upcoming meeting.
• In parallel, the September Fed Beige Book points to upside risk to the US inflation outlook and will likely keep the central bank on a cautious easing path. According to the Beige Book, “Most Districts reported that their firms were expecting price increases to continue in the months ahead, with three of those Districts noting that the pace of price increases was expected to rise further.”
• Federal Reserve officials struck a dovish tone on Wednesday. Governor Christopher Waller said the Fed should “start cutting rates at the next meeting,” adding that multiple cuts could follow within six months. Atlanta Fed President Raphael Bostic noted that “some easing in policy — probably on the order of 25 basis points — will be appropriate” this year, while stressing inflation risks remain. St. Louis Fed President Alberto Musalem said policy is “in the right place for now,” but warned that cooling in the labor market could justify a shift if the trend continues.

Technical analysis: XAU/USD consolidates, RSI overbought as traders eye $3,500 support

XAU/USD is consolidating after reaching fresh record highs on Wednesday, with momentum indicators showing signs of cooling. The Relative Strength Index (RSI) on the daily chart remains in overbought territory above 70, but points downwards, suggesting scope for a pause or pullback. The Average Directional Index (ADX) stays above 25, signaling that the bullish trend is still strong, though stretched.

Gold’s rally has also pushed prices to the top of the Bollinger Bands, with spot trading close to the upper band near $3,543. This signals strong bullish momentum but also warns of overextension. A retreat toward the mid-band, which also serves as the 20-day Moving Average (MA) around $3,398, cannot be ruled out if profit-taking deepens.

On the downside, immediate support lies at the daily low of $3,511, followed by the psychological $3,500 level. A deeper correction would bring focus to the $3,450 zone, a former resistance level that has now turned into strong support. On the upside, the record high at $3,578 remains the key resistance, with a sustained break paving the way toward the $3,600 handle as the next target.