Gold Daily | Spot Gold Drops 1% on Strong US Payroll Data, Faces Resistance at $3,400 Level

【Latest Gold Price and Recent Trends】

On Friday, gold prices dropped over 1% after the U.S. May nonfarm payroll data exceeded expectations, with spot gold closing at $3,309.84 per ounce, showing a weekly gain of 0.8%. Gold is likely to fluctuate between $3,300 and $3,400 per ounce in the short term due to market resilience, despite failing to break the $3,400 resistance level.

【Technical Analysis】

Gold prices face downward pressure below the $3,400 per ounce level, dominated by bearish sentiment. If prices fall below $3,360, they may further decline to $3,300 or even $3,000 per ounce. Initial support is seen above $3,300, suggesting continued buy-side interest, with $3,200 as a key support level.

【Market Sentiment and Economic Background】

The U.S. May nonfarm payrolls increased by 139,000, surpassing market expectations of 130,000, with the unemployment rate steady at 4.2% and wage growth exceeding forecasts. This reduces the likelihood of imminent Federal Reserve rate cuts, strengthening the dollar and U.S. bond yields, exerting pressure on gold prices. Despite a rise in risk assets such as equities, gold continues to demonstrate resilience, supported by central bank diversification needs and market demand for safe-haven assets.

【Analyst Opinions】

Tanglewood's macro investment strategist Tom Bruce advises investors to increase gold holdings at lower prices, believing the long-term upward trend remains intact, supported by central bank purchases and dollar weakness. Pepperstone's senior research strategist Michael Brown highlights the support for gold from central bank reserve diversification demands and market safe-haven needs, underscoring its appeal as a safe-haven asset.

【Other Precious Metals】

Silver rose to a 13-year high, driven by investment demand and expectations of supply shortages. Platinum hit a 3-year high, supported by similar factors. UBS analyst Giovanni Staunovo suggests silver's relative undervaluation compared to gold has attracted speculative funds, with potential for further increases. Bloomberg's Mike McGlone notes platinum's key support at $1,000 per ounce, with resistance at $1,300 following its recent rally above $1,100.

【Market Background and Outlook】

Gold prices tested the $3,400 resistance level on Thursday but retreated following profit-taking and strong nonfarm data on Friday. LPL Financial's chief economist Jeffrey Roach suggests the labor market is stabilizing, with a low probability of short-term rate cuts by the Federal Reserve. Next Wednesday's May CPI data will be pivotal for gold's movement; if hot, it could lift the dollar and suppress gold prices, while a softer reading might aid gold's upward trajectory. Geopolitical and trade factors remain influential, with limited progress in recent trade talks.