Gold prices extended their advance on Tuesday, with spot XAU/USD trading above $3,360, buoyed by sustained bullish momentum and continued weakness in the U.S. dollar. The precious metal is recovering firmly from last week’s minor pullback, as market sentiment turns risk-sensitive ahead of Friday’s critical Non-Farm Payrolls (NFP) release.
Dollar Remains Soft, Supporting Gold’s Climb
The U.S. dollar is attempting a modest rebound after Monday’s softer-than-expected ISM Manufacturing PMI, but gains remain capped below the 99.129 level—a key 4-hour Bearish Fair Value Gap (FVG). The lack of follow-through from dollar bulls is providing solid support for gold prices.
Traders remain cautious amid expectations that the Federal Reserve may adopt a more dovish tone in the coming months, particularly in light of recent economic data and growing fiscal concerns. Until the dollar can break decisively above the FVG resistance zone, the broader bias remains tilted to the downside, favoring continued gold strength.
Technical Outlook: Pullback May Offer Entry Point
A near-term pullback to the $3,325–$3,345 support zone could provide a potential bounce opportunity for buyers looking to position ahead of upcoming macro risk events. If this zone holds, gold could resume its push toward the psychologically important $3,400 level.
With the market bracing for Friday’s NFP report—one of the Fed’s key labor market indicators—the next leg of gold’s rally may hinge on whether incoming data confirms the case for looser monetary policy.
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