Gold is challenging its recent downward trajectory following the release of the US employment report on July 2, which showed weaker-than-anticipated hiring trends. The labor market data indicated a slowdown in job creation to a multi-month low, tempering bets for aggressive Federal Reserve rate hikes. Concurrently, the minutes from the Fed’s June meeting, set for release on July 8, may clarify the duration of the central bank’s more accommodative stance, reinforcing demand for safe-haven assets like gold.
Technical Analysis
The four-hour XAU/USD chart reveals a notable breakout. Prices fell from $4,221 in late June to $3,942, where a rebound commenced. This decline formed a descending wedge pattern, with the lower boundary experiencing strong accumulation. The subsequent sharp recovery included a decisive move above both the pattern and the prevailing market structure.
On July 2, XAU/USD closed above the market profile’s upper boundary at $4,091. If the rally persists, the wedge’s base level could be targeted. A reversal would likely test the profile’s high-volume zone, while critical support levels at the Point of Control ($4,030) and the lower boundary ($3,971) may offer buyers entry points.
The RSI + MAs indicator shows readings of 62, 65, and 55, respectively, all above neutral and trending upward. This aligns with bullish momentum from moving averages. However, the RSI’s entry into overbought territory suggests traders should approach further gains with caution.
Key Insights
The wedge breakout may signal a potential trend shift, though testing resistance zones above remains speculative. The upcoming Fed meeting minutes release could significantly alter market sentiment, making near-term price action highly sensitive to policy expectations.
