Gold prices gave back a sliver of Friday’s impressive gains before rising further to reach $3385 per ounce. The metal remains supported, as traders look adjust their Federal Reserve rate expectations towards the dovish side of things, following surprisingly weak jobs data and President Trump’s dismissal of the Bureau of Labor Statistics (BLS) chief – accusing the agency of “political interference.” On top of this, Fed Governor Adriana Kugler’s early exit, months before her scheduled departure, leaves a seat open at the monetary policy table just as markets seek clarity on the Fed’s next move. The immediate implication of these events has weighed on the dollar and supported bonds and gold. But beyond this, markets are left without any other clear catalysts, and gold appears to be biding its time. We maintain a natural gold forecast despite Friday’s big rally.

Gold forecast: Dovish Fed signals eyed this week

Apart from the ISM services PMI, there is little in the way of market-moving data this week. So, the focus turns squarely to central bank developments. The dovish interpretation of recent events – particularly Kugler’s resignation and weak jobs data over the past couple of months – has cast doubt over how aggressive the Fed may be in the months ahead.

Tuesday brings US ISM Services data, and later in the week, attention shifts across the Atlantic to the Bank of England’s latest policy decision. Still, it’s a relatively light macroeconomic calendar, meaning gold traders may rely more on headlines and sentiment than hard numbers in the short term.

A surprise miss in Europe’s Sentix Investor Confidence index (printing -3.7 against a consensus of +6.2) highlights persistent fragility in eurozone optimism. While this may nudge some investors back towards the US dollar, it’s hardly the sort of development to drive gold on its own.

👉  Read our longer term gold forecast here.

Supportive landscape, but where’s the spark?

There’s no denying gold’s resilience. Despite equity markets stabilising in the face of Trump’s tariffs, gold has held up well. The broader tariff arrangement reached recently – while staving off a full-blown trade war – is still seen as a net drag on global growth, helping justify continued interest in safe haven gold. But here’s the rub: the metal’s run has already been remarkable, as traders bought on expectations of a tariff war or at least high tariff rates. Prices hit a record above $3,500 earlier this year, and the surge has cooled in recent months. The big question now is whether there’s a new story to tell – something compelling enough to take prices meaningfully higher again.

Friday’s soft jobs numbers triggered a notable bounce, but whether that’s enough to mark a new leg higher remains debatable. For what it is worth, I, for one, am doubtful.

Shor-term technical gold forecast

From a technical viewpoint, gold’s rally on Friday has improved the near-term outlook. The metal has reclaimed its 21-day exponential moving average and broken back above key resistance levels, notably recapturing the $3,335 zone. That level now acts as initial support, and unless bears push decisively below it again, the upward bias remains intact.

The bulls have already achieved their first and second upside targets around $3,360 and $3,385 on the daily gold chart. The next point of interest lies at $3,400, which also coincides with a descending trendline. This area could be tough to crack without a fresh driver, but a clean break might open the door for a retest of those lofty April highs.

For now, gold appears comfortable consolidating, supported by a murky macro backdrop, a softer dollar, and geopolitical uncertainty. But without a clear catalyst, the rally risks stalling.

— Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R