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Published: 6 July 2026,09:01
Daily Market Analysis New
*US dollar continues to weaken as markets digest softer-than-expected jobs data
*Cooling labor market conditions reduce expectations for a near-term Fed rate hike
*Lower oil prices ease inflation concerns and further weigh on dollar demand
*Gold extends gains as weaker USD and lower yields support the precious metal
The Dollar Index, which tracks the greenback against a basket of six major currencies, continued to extend its losses last week as market participants digested softer-than-expected U.S. jobs data. The weaker labor market report prompted traders to reassess the likelihood of further Federal Reserve rate hikes in the near term.
Recent U.S. Nonfarm Payrolls data came in below expectations, while prior months’ payroll gains were revised lower, pointing to a cooling labor market. The softer data reduced pressure on the Federal Reserve to tighten policy aggressively, especially after Fed Chair Kevin Warsh appeared to temper his previously hawkish inflation stance last week.
At the same time, oil prices have also eased, helping reduce concerns over renewed inflation pressure. Lower energy prices have made markets less worried that the Fed may need to respond with additional rate hikes, further weighing on the appeal of the dollar.
Gold prices, on the other hand, extended gains as the weaker dollar provided support for the precious metal. Bullion hovered near a two-week high, benefiting from reduced rate-hike expectations and softer Treasury yields. As gold is priced in U.S. dollars, a weaker greenback makes it more attractive to foreign buyers.
Data released on Thursday showed that U.S. job growth slowed sharply in June, while payroll gains for the previous two months were revised lower. This reinforced the view that the labor market is gradually cooling and encouraged financial markets to dial back expectations for a near-term Fed rate hike.
According to the CME FedWatch tool, traders now see around a 55% chance of a rate increase in September, down from more than 60% before the data. This shift in expectations has supported gold by reducing the opportunity cost of holding non-yielding assets.
Beyond the Federal Reserve, stabilising oil prices have also eased expectations that global central banks need to maintain aggressive tightening policies. Overall, the combination of softer U.S. data, lower oil prices, and reduced rate-hike expectations has weighed on the dollar while supporting gold’s near-term recovery.
Technical Analysis
GOLD, H1:
Gold prices are trading higher, currently testing the 4,205.00 resistance level, which acts as a key near-term breakout zone.
Momentum remains constructive, with the MACD showing diminishing bearish momentum and the RSI at 67 staying above the midline, suggesting that bullish pressure remains intact.
All eyes are on a potential breakout above 4,205.00. A confirmed breakout could extend gains toward the next resistance level at 4,350.00, reinforcing the bullish structure.
However, if bullish momentum fails to persist, gold may experience a technical pullback and retest the 4,085.00 support level, followed by 3,960.00 if selling pressure increases.
Resistance Levels: 4205.00, 4350.00
Support Levels: 4085.00, 3960.00
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