Gold Price Outlook: $3,268 Breakout in Focus Ahead of Fed Rate Decision & ISM Data
Gold price eyes breakout above $3,268 as traders brace for Fed rate decision, ISM PMI, and jobs data next week.
Quick overview
- Gold closed the week at approximately $3,241, influenced by a strong U.S. jobs report and easing trade tensions between the U.S. and China.
- The addition of 177,000 jobs in April exceeded expectations, leading to reduced rate cut bets and higher Treasury yields, which negatively impacted gold's attractiveness.
- Market sentiment is shifting towards optimism regarding trade deals, which may keep gold prices capped below $3,500 for the time being.
- Upcoming U.S. macro data, including the Fed's rate decision and ISM Services PMI, could introduce volatility in gold prices, with a key resistance level at $3,268.
Gold ended the week near $3,241, facing downward pressure after a solid U.S. jobs report and signs of easing trade tensions between Washington and Beijing.
Nonfarm payrolls added 177,000 jobs in April, surpassing expectations of 130,000. The data reduced near-term rate cut bets, pushing Treasury yields higher and making non-yielding gold less attractive.
Adding to gold’s challenges, China’s Commerce Ministry signaled openness to tariff negotiations. Market strategist Daniel Pavilonis noted that recent optimism around trade deals and a return of risk-on sentiment may keep gold capped below $3,500 for now.
Traders are now dialing back their June rate cut expectations, especially after the bond market reacted with a jump in 10-year yields.
Fed, Jobs, ISM: Big Week Ahead for Gold
Next week brings a heavy dose of U.S. macro data that could drive gold volatility. Here’s what to watch:
- May 6: ISM Services PMI (forecast: 50.2; previous: 50.8)
- May 7: Fed Funds Rate (expected to hold at 4.50%)
- May 7: FOMC Statement & Press Conference
- May 8: Unemployment Claims (forecast: 232K; prior: 241K)
- May 9: FOMC Member Waller speaks
The Fed is unlikely to change rates, but traders will focus on Chair Powell’s tone at the press conference. A shift toward dovish rhetoric could revive gold’s appeal.
Gold Technical Setup: Watch $3,268 for Bullish Trigger
GOLD price action suggests a tug-of-war between bulls and bears. XAU/USD is trading just below a descending trendline and the 50-period EMA at $3,268. A breakout and hold above this level could confirm bullish intent, opening the path toward $3,275 and $3,295.
Immediate support lies at $3,231, followed by $3,204. The MACD remains bearish but is showing early signs of stabilization.
Key Trade Levels:
Entry: Break and hold above $3,268
Target: $3,275 → $3,295
Stop Loss: Below $3,231
New traders should avoid chasing breakouts too early—wait for confirmation above resistance. With key macro events on deck, volatility could spike, offering better entries after pullbacks.
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