Gold investors cautious ahead of key US economic data

Market Overview

Gold prices edged lower during Asian trading hours on Wednesday as the US dollar extended its recent recovery, driven by risk aversion and rising Treasury yields. However, losses in gold remain contained, as safe-haven demand persists following the escalation of global trade tensions triggered by President Donald Trump’s fresh tariff announcements. As a result, investors continue to seek shelter in gold, although short-term sentiment remains cautious ahead of key US economic data due later in the day. The balance between safe-haven flows and the dollar’s rebound leaves gold in a delicate position, with traders largely on the sidelines awaiting clearer economic signals.

Technical Analysis

On the one-hour chart, gold has been consolidating after completing a corrective pullback near the 2830 level, where buyers gradually regained control. The subsequent upward rebound lifted prices into a narrow sideways range, defined by immediate resistance at 2920.48 and short-term support at 2902.11. For bullish continuation, buyers need to decisively breach the upper boundary at 2920.48, which would clear the path toward higher targets at 2925.48, followed by 2931.83 and 2938.85, aligning with key Fibonacci extensions from the recent upward swing.

Momentum indicators offer a mixed picture. The RSI remains above the neutral 50 level, indicating that buyers still hold a slight advantage. However, the MACD histogram has started to flatten, suggesting fading bullish momentum and the potential for consolidation in the near term. If sellers regain control and drive prices below 2913.46, the immediate downside target lies at 2902.11. A confirmed break below that level would signal a potential shift into a new short-term downtrend, opening the way toward deeper supports.

Key Technical Levels

• Resistance 1: 2920.48
• Resistance 2: 2925.48
• Resistance 3: 2931.83
• Resistance 4: 2938.85
• Support 1: 2913.46
• Support 2: 2902.11

Fundamental Drivers

Traders remain cautious ahead of key US economic reports set for release today. The ADP Non-Farm Employment Change will offer an early glimpse into labour market conditions ahead of Friday’s official payrolls data. Forecasts point to a moderate decrease in employment, but any significant deviation—particularly weaker-than-expected figures—could reinforce expectations for a softer Federal Reserve policy stance, weighing on the dollar and supporting gold.

Additionally, US S&P Global Services PMI  and ISM Non-Manufacturing PMI will shed light on the health of the service sector, which remains a key driver of US economic activity. A weaker reading would raise further concerns about slowing momentum, especially in light of tightening credit conditions and trade-related disruptions.

Broader geopolitical risks also remain firmly on the radar. Ongoing uncertainty over trade relations, particularly the US stance towards China and North America, continues to cloud the global economic outlook. This dynamic is keeping underlying safe-haven demand intact, limiting gold’s downside even when the dollar strengthens.

Conclusion

Gold remains locked within a narrow consolidation range, with near-term direction dependent on the outcome of today’s US economic data. A break above 2920.48 favours further upside, while failure to hold above 2913.46 risks deeper retracement.

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