Gold Prices Extend Losses Ahead of US NFP Report
Gold prices continued to trade in negative territory on Friday’s early European session, hovering near the US$4,450 level as investors awaited the highly anticipated US Nonfarm Payrolls (NFP) report and monitored escalating geopolitical tensions in the Middle East.
The precious metal remained under pressure as traders closely watched developments surrounding the US-Iran peace negotiations and the upcoming May US employment data, which could provide fresh direction for the Federal Reserve’s monetary policy outlook.
Gold Technical Analysis Signals Ongoing Bearish Momentum
On the daily chart, XAU/USD maintained a short-term bearish bias as prices continued trading below the 100-day Moving Average and beneath the midpoint of the Bollinger Bands, preserving the broader downward trend.
The Relative Strength Index (RSI) remained near 40, indicating weak momentum without entering oversold territory. This suggests sellers are still controlling the market while leaving room for additional downside movement before signs of exhaustion emerge.
On the upside, initial resistance is located near the Bollinger Bands midpoint around US$4,545. Stronger resistance levels are seen near the upper Bollinger Band at US$4,715 and the 100-day Moving Average around US$4,795 if a rebound develops.
Meanwhile, the first major support level stands near the lower Bollinger Band around US$4,370. A decisive break below this zone could trigger a deeper retracement, while holding above support may indicate a period of consolidation within the current bearish structure.
US-Iran Tensions Continue to Pressure Gold Market
Iranian Foreign Minister Abbas Araghchi stated on Wednesday that “no real progress” had been achieved in negotiations aimed at ending the Middle East conflict. He added that communication channels with Washington remain open but warned that any Israeli attack on Beirut during its campaign against Hezbollah could trigger a “full resumption” of the US-Iran conflict.
Despite Iran’s cautious stance, US President Donald Trump claimed that ceasefire negotiations were entering their “final stages.” On Wednesday, Iran reportedly launched missiles and drones toward Kuwait and Bahrain following a US strike on an oil tanker heading toward the Islamic Republic.
The lack of progress in ceasefire talks following the latest escalation in violence has intensified concerns over persistent inflation and higher interest rates, both of which continue to weigh on non-yielding assets such as gold.
Bart Melek of TD Securities noted that rising inflation expectations linked to supply shocks have pushed Treasury yields higher, strengthened the US dollar, and increased market expectations for another Federal Reserve rate hike by late 2026.
US Nonfarm Payrolls Data in Focus
Investors are now turning their attention to the upcoming US labor market report. Economists expect the May Nonfarm Payrolls report to show an increase of 85,000 jobs, while the unemployment rate is forecast to remain steady at 4.3%.
Any weaker-than-expected labor market data could pressure the US dollar and provide short-term support for gold and other US dollar-denominated commodities.