Dollar Weakness Useless...Will Gold Price Break $4,000?

▲ Gold, Dollar (USD)/AI-generated image

Despite the weakening dollar, gold prices failed to gain momentum near $4,000. Rising US Treasury yields and employment figures halted the upward trend.

According to FXLeaders, a financial market specialized media outlet, on August 2 (local time), gold prices ended the weekly trading near the psychological support level of $4,000 per ounce. Although the US dollar showed weakness, the rebound was limited as Treasury yields remained high.

US economic indicators sent mixed signals to gold prices. The preliminary estimate for the US Q2 GDP growth rate recorded approximately 1.5%. The personal consumption expenditure (PCE) price index growth rate was only 0.1%. Slowing growth and price stability could raise expectations for monetary policy easing by the Federal Reserve (Fed), but high Treasury yields reduced the attractiveness of non-interest-bearing assets like gold.

The strong performance of the labor market, as indicated by the ADP private employment report, also acted as a burden. The market expected US non-farm payrolls to increase by approximately 85,000 and the unemployment rate to remain at 4.3%. If employment is weaker than expected, gold prices could rebound along with expectations of interest rate cuts. If employment comes out strong, high interest rates and Treasury yields could put renewed pressure on gold prices.

Technically, the 200-day moving average served as a support level. Gold prices fell to $3,942 after breaking below the 50-day and 100-day moving averages in the first half of 2026. Subsequently, it rebounded from the $3,940 level to reclaim the $4,000 mark, but on the weekly chart, it remained below the 50-week moving average.

China's physical demand provided underlying support. China's gold imports in June were approximately 173 tons, the highest since March 2024. Total imports in the first half of the year reached approximately 820 tons. However, as some Chinese state-owned banks halted individual trading of certain precious metal derivatives, short-term liquidity and speculative demand may shrink. US employment figures, Treasury yields, and tensions surrounding Iran and the Strait of Hormuz remained key variables determining the next direction of gold prices.

[Article Key Summary]

-Despite the weakening dollar, gold prices showed limited movement around $4,000, hampered by high US Treasury yields.

-US non-farm employment was expected to increase by 85,000, and the unemployment rate was projected to remain at 4.3%.

-The 200-day moving average and China's 173 tons of gold imports in June supported the lower end of gold prices.

*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.*