Gold rebounds towards $4200. Can it go higher? Also, 3 other assets that hit forecasts!
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Today, spot gold is back within touching distance of the $4200 level.
This marks gold’s highest prices in nearly 2 weeks, since June 23rd.
Spot gold’s return towards $4200 was enabled by the steep slowdown in US hiring last month.
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As expected: Surprise slowdown in US hiring “boosts” gold
In yesterday’s (Thursday, July 2nd) “Market Pulse” report, as we previewed the incoming US jobs report a.k.a. nonfarm payrolls (NFP), here’s what we wrote:
“An unexpected rapid deterioration in US hiring (drastically lower than 113k) that dilutes bets for Fed rate hikes in 2026 could translate into a weaker dollar, likely boosting US dollar-denominated assets e.g. precious metals like Gold (XAUUSD+) ...”
Indeed, the US jobs market experienced a sharp slowdown, adding “just” 57,000 new jobs in June, far lower than the 113,000 figure forecasted by economists.
Although June’s unemployment rate fell to 4.2%, the participation rate* also fell to 61.5% - its lowest reading in over 5 years!
*participation rate = the share of the population who are working or looking for work
In response, markets lowered bets for Fed rate hikes this year:
as of July 1st: 79% chance of a September rate hike, 45% chance of TWO Fed rate hikes by end-2026.
vs.
as of July 3rd (post-NFP): 61% chance of a September rate hike, 20% chance of TWO Fed rate hikes by end-2026.
NOTE: Gold prices tend to rise when investors expect US interest rates to remain unchanged or fall; gold tends to fall when rate hike expectations rise.
Gold duly soared on the news, rising as much as 1.9% in the 6 hours after the NFP’s release - greater than the 1.3% upside move forecasted by Bloomberg models.
Also as expected: By June 30th, spot gold also hit our downside target of $3949 (per Bloomberg model) set on June 24th - touching its lowest levels since November 2025 - before rebounding!
What’s next for Gold? Check out Bloomberg model’s 1-week forecast
To be clear, a single NFP release does not make a trend.
Hence, traders and investors around the world must continue monitoring the jobs and inflation data over the coming months to inform their Fed policy outlook.
IMPORTANT: The next US inflation data release (CPI = consumer price index) is due on July 14th.
Further signs of subsiding inflationary pressures should extend the runway for gold’s rebound, also noting Fed Chair Warsh’s less-hawkish view this week when he noted that “inflation risks have come down”.
Bloomberg’s model forecasts a 74% chance that gold will trade between $4057.70 - $4317.10 between now and next Friday, July 10th.
Technical Analysis
To be clear, despite the post-NFP rebound, spot gold remains well within its downtrend (series of lower highs and lower lows) that has been in place since late-January.
Bullion bulls (those hoping prices will go higher) must conquer multiple key resistance levels:
$4270-$4300: Downward sloping upper trendline that began on Jan 29th intraday record high
$4380: mid-June cycle high, also crucial support zone in late-March and late-May
50-day simple moving average (SMA): a widely-followed technical indicator that also currently resides around the $4380 region
Gold’s Fundamentals > Technicals
This notion of fundamentals overcoming technicals is illustrated by gold’s 2.3% advance since it formed a “death cross” last Friday, June 16th.
NOTE: A “death cross” is a technical pattern formed when an asset’s 50-day SMA crosses below its 200-day SMA, and typically signals further price declines ahead.
Gold remains primarily driven by the shifting expectations surrounding Fed rate hikes.
Should markets revert to the belief that the Fed can proceed with 2 rate hikes by end-2026, that could see spot gold dipping back below $4000 once more.
3 Big Trades you may have missed
1) Nike hits upside target!
Monday, June 29th - What we wrote: “Can Nike stocks recover from near-12 year low? Also, upside target set at $43.94.
Thursday, July 2nd: Nike stocks soar and respects/rests around the $43.94 upside target.
NOTE: US stock markets are closed today (Friday, July 3rd) ahead of Independence Day.
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2) Bitcoin rebounds and tests resistance around 21-day SMA
“... assuming markets are prompted to pare back their expectations for Fed rate hikes, could see BTC rebounding to meet its 21-day SMA for resistance.”
Thursday, July 2nd: Bitcoin advances after lower-than-expected NFP (US jobs report) and duly resisted around its 21-day SMA.
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And going a little further back ...
3) Solana finally hits $78 upside target drawn since June 15th
This setup took nearly 3 weeks to play out - better late than never.
Wednesday, July 1st: Solana finally hits $78, before soaring to 1-month high!
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FACT: Among the 10 biggest cryptos by market cap, Solana has been the biggest gainer since being chosen among our “3 Assets to Watch” on June 15th.
% performance since June 15th closing price:
(ranked by market cap, excluding stablecoins)
Bitcoin: -7.4%
Ethereum: -5.4%
Binance Coin: -9.3%
Ripple: -13%
Solana: +7.9%
TRON: -0.2%
HYPE: +1.05%
Dogecoin: -16%
(SOURCE: Bloomberg data)
Don’t miss our new list of “3 Assets to Watch” due coming Monday, July 6th.
DISCLAIMER:
This article is provided for general information and reflects the author’s views only. It does not constitute investment advice, nor an offer or solicitation to buy or sell any financial instruments or digital assets. Your ability to access or use any products or services mentioned may be subject to the laws and regulatory requirements of your jurisdiction.