Jobs Report Looms as Dollar Sinks, Gold Climbs

Key Takeaways:

*Dollar Weakens on Fed Cut Bets – Softer labor data and dovish Fed signals drive expectations for a September rate cut, with odds near 95%.

*Gold Hits Record Highs – Haven demand and collapsing yields propel bullion above $3,590, with momentum building toward $3,600–$3,800.

*Jobs Report in Focus – Friday’s NFP could confirm easing path: weak data fuels gold and pressures the dollar, while strong data offers only short-lived relief.

Market Summary:

The U.S. Dollar Index (DXY) continued to weaken, sliding to 98.16 as Fed easing bets intensified following another disappointing labor market signal. The JOLTS report showed job openings falling to 7.18 million, the lowest in ten months and notably below forecasts. More significantly, for the first time since 2021, the number of available jobs fell short of unemployed workers, underscoring a meaningful cooling in labor demand. Fed officials quickly leaned into the dovish narrative—Governor Waller urging cuts “at the next meeting” and Atlanta Fed President Bostic confirming that September is “in play.” Futures now assign a 95% probability of easing next month, with markets even entertaining the prospect of a 50bps “jumbo” cut.

Beyond near-term monetary policy, structural headwinds continue to weigh on the greenback. Rising U.S. debt levels and persistent political interference in the Fed’s independence have dampened investor confidence in dollar-denominated assets. President Trump’s latest effort to remove Governor Lisa Cook has raised questions about institutional stability, while a weaker dollar amplifies concerns about servicing foreign-denominated obligations. Together, these factors highlight the vulnerability of the dollar even as short-term rebounds remain possible around data surprises.

Gold has emerged as the clear beneficiary of the dollar’s slide and collapsing yields, surging to a record $3,593.70/oz. The rally reflects a powerful trifecta of drivers: dovish Fed expectations, heightened geopolitical risk, and broad-based safe-haven demand. ETF holdings have surged to two-year highs, with the SPDR Gold Trust reporting inflows that lifted total assets near 978 tons. Central banks, already accumulating bullion at a historic pace, continue to reinforce the long-term bid. Institutional demand has been further bolstered by concerns over U.S. governance and the potential erosion of confidence in dollar assets, making gold a preferred hedge against both policy and political risk.

From a market perspective, the decisive break above the $3,500 level has added technical momentum to an already bullish backdrop. The immediate catalyst, however, will be Friday’s Nonfarm Payrolls report. A weak print could cement expectations for a September cut and extend the dollar’s decline while propelling gold deeper into uncharted territory. Conversely, a stronger labor signal may offer the greenback temporary relief, but with political risks and structural vulnerabilities in play, any rebound is likely to prove fragile.

Technical Analysis

DXY, H4

U.S. Dollar Index (DXY) is consolidating within a tight range near 98.17 after stalling below the 98.75 resistance zone. Price is holding above the 98.10–97.65 support band, keeping the broader structure intact but lacking clear directional momentum as traders await fresh catalysts. A breakout above 98.75 would expose the 99.60 level, while a downside breach could re-open the path toward 97.10.

Momentum indicators paint a mixed picture. The RSI sits at 52, reflecting neutral conditions with no immediate trend bias, while the MACD remains flat around the zero line, signaling indecision. The lack of strong conviction suggests price may continue oscillating until a catalyst sparks a directional move.

Overall, DXY is in a consolidation phase, with a break above 98.75 needed to shift bias firmly bullish toward 99.60. Conversely, failure to hold 98.03 could invite renewed selling pressure, with deeper support at 97.65 and 97.10.

Resistance levels: 98.75, 99.60
Support levels: 98.10, 97.65

XAUUSD, H4

Gold (XAU/USD) is consolidating just below the $3,557.00 level after a sharp breakout from the $3,495.00 zone, establishing a higher base structure above the $3,507.00–$3,495.00 support band. The move has brought the $3,615.00 barrier into view, with scope for an extension toward $3,677.00 if bullish momentum holds.

Momentum indicators are leaning constructive but stretched. The RSI stands at 73, holding in overbought territory and flagging risk of near-term cooling, while the MACD remains firmly positive with a strong bullish crossover, keeping momentum tilted in favor of buyers.

Overall, XAU/USD carries a bullish-to-neutral bias above $3,495.00, with a decisive push through $3,557.00 required to unlock further upside toward $3,615.00 and $3,677.00. On the downside, failure to sustain traction could see price retrace toward $3,507.00 and deeper support at $3,495.00 before fresh trend signals emerge.

Resistance levels: 3615.00, 3677.00
Support levels: 3550.00, 3495.00