Gold Price Remains Capped Below Highs as NFP, Trade Hopes Weigh

Gold Price Retreats from Highs Ahead of US Jobs Report

Gold (XAU/USD) remains steady but unable to sustain intraday gains on Friday, June 6, as the market turns cautious ahead of the release of the US Nonfarm Payrolls (NFP) report. The precious metal trades below the multi-week high reached earlier this week, as traders wait for clearer direction.

US-China Trade Optimism Weighs on Gold Rally

Renewed optimism around the resumption of US-China trade negotiations has dampened the safe-haven appeal of Gold. Market risk appetite improved after comments suggesting progress in talks, prompting investors to trim their long positions in non-yielding assets like Gold.

US Dollar Firms Ahead of NFP

The US Dollar (USD) is drawing support from pre-NFP repositioning, acting as another headwind for Gold. Stronger-than-expected employment data could boost the greenback further, making Gold more expensive for foreign currency holders and limiting its upside potential.

Fed Rate Cut Bets and Geopolitical Risks Still Supportive

Despite headwinds, expectations of Fed rate cuts in 2025 provide underlying support to Gold. Lower interest rates reduce the opportunity cost of holding Gold, enhancing its appeal in a falling yield environment.

Ongoing geopolitical risks, including the Russia-Ukraine war and escalating tensions in the Middle East, also keep safe-haven demand for Gold intact. This limits the downside for XAU/USD even if short-term rallies remain capped.

Technical Outlook: Bulls Need a Break Above Resistance

Gold needs a confirmed breakout above recent multi-week highs to encourage fresh bullish momentum.
Immediate support lies near the $2,320 level, while resistance is seen near $2,355 and $2,380.
The near-term trend remains neutral to slightly bullish as long as prices stay above key moving averages.