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Gold barely reclaimed the $4,000 support level, curbing fears of a sharp decline, but the US employment report and a strong dollar emerged as key variables that will determine the direction this week.
According to financial media outlet FX Leaders on June 28 (local time), gold fell below the $4,000 mark due to early session selling pressure, then quickly rebounded. Although weekly losses continued, the recovery of $4,000 was interpreted as an important technical signal for maintaining the long-term upward structure.
The biggest variables weighing on gold prices were the strong US dollar and rising Treasury yields. The Federal Reserve (Fed) kept benchmark interest rates unchanged at its recent meeting, but new economic projections suggested that interest rates could remain at elevated levels for longer than market expectations. Some forecasts even pointed to the possibility of further rate hikes instead of cuts in 2026.
Geopolitical factors also rattled the gold market. The US and Iran announced a framework aimed at easing regional tensions, reopening the Strait of Hormuz, and resuming nuclear negotiations. As ceasefire expectations grew, demand for safe-haven assets weakened, but uncertainty over the agreement's implementation remained as both sides exchanged attacks again over the weekend.
Technically, the correction in early 2026 was severe. Gold broke below its 20-day simple moving average and also fell below its 50-day moving average near $5,000. By late March, it had fallen below the early February low of $4,400, and last week, XAU formed a bottom at $3,549 and found support near its 200-day simple moving average.
This week, the market's focus shifts to the US Non-Farm Payrolls (NFP) report. New jobs in June are expected to be around 115,000, a slowdown from May's 172,000. The unemployment rate is projected to remain at 4.3%, and average hourly earnings are expected to rise by 0.3% month-over-month.
If employment and the ISM Manufacturing PMI are stronger than expected, expectations for interest rate cuts will weaken further, and a strong dollar could put additional pressure on gold. Conversely, if economic indicators are weak, expectations for policy easing could revive, and gold buying could gain momentum again. FX Leaders reported that while gold holds its key $4,000 level, the defense of the long-term uptrend continues.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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