Gold hovers near $4,000 as NFP data may decide next move

Gold faces a pivotal test this week as Thursday's Non-Farm Payrolls report could determine whether the metal breaks higher or extends its 27% decline from January's record.

Gold traded near $4,100 per troy ounce on Monday, down 5% year-to-date and 27% below the January all-time high of $5,600, as a hawkish Federal Reserve and a stronger dollar weighed on the precious metal. Thursday's NFP report — with a consensus estimate of 66,000 jobs added — represents the next major catalyst for gold, with traders positioning for a breakout or a deeper selloff depending on the outcome.

"The labor market narrative is at an inflection point," said James Hyerczyk, a technical analyst with over 40 years of market experience. "Annual revisions could slash up to 900,000 jobs from previously reported gains, which would be a major shift and could solidify a Fed rate cut as early as June."

A weaker-than-expected NFP reading would likely push Treasury yields lower and weaken the dollar, creating a tailwind for gold. The 10-year yield already fell to a near one-month low last week after data showed a dip in core U.S. retail sales and downward revisions to prior months. Conversely, a strong jobs number would reinforce the Fed's hawkish stance under Chair Kevin Warsh, who has signaled no rate cuts this year, and could drive gold below the psychologically critical $4,000 handle.

Technical levels define the trading range

The $4,150 zone represents the immediate overhead resistance and a cluster of buy-stop liquidity, according to technical analysis of the COMEX gold market. A sustained H4 or daily candle close above this level would confirm a structural shift in market mechanics and open a path toward $4,183, a level that aligns with a previous daily supply zone. A break above $4,183 would set up a retest of the stronger $4,220 resistance.

On the downside, a break below $4,054 — the local demand failure point — would signal a continuation of the broader bearish order flow. The next target sits at $4,022, a critical higher-timeframe demand block and a previous structural swing low where institutional buyers may step in. A sweep below this level could trigger a corrective rebound back toward $4,100 or higher.

Wall Street sees upside potential despite near-term headwinds

Despite the recent selloff, major Wall Street firms still see significant upside from current levels. JPMorgan recently cut its gold price forecasts by $600 to $5,300 for the third quarter and by $300 to $6,000 for the fourth, implying roughly 45% upside from current prices. Goldman Sachs lowered its year-end target by $500 to $4,900, which still represents about 20% upside. State Street Investment Management's base case puts gold between $4,750 and $5,500, with a bull case of $6,000 — a new record.

Central bank demand continues to provide a structural floor. A World Gold Council survey showed 45% of 76 central bank respondents expect to increase their gold reserves over the next year, with China building reserves to support the renminbi's emergence as a credible reserve currency alternative, according to JPMorgan's head of base and precious metals, Greg Shearer.

The NFP report is due at 13:30 GMT on Thursday. Gold at $4,000 represents a key psychological level that has acted as a structural pivot in recent sessions. A break below this level could accelerate selling toward $3,950, while a strong NFP miss could drive a rapid recovery toward $4,200.

This article is for informational purposes only and does not constitute investment advice.