In the New York trading session, gold prices experienced significant volatility following Federal Reserve Chairman Jerome Powell’s speech and the release of U.S. job vacancies data. Initially, gold prices surged to $2,337 per ounce before plummeting to $2,320 per ounce, then rebounding to around $2,330 per ounce.
Powell’s remarks at a monetary policy meeting in Portugal indicated that the U.S. economy is returning to a path of slowing inflation, noting considerable progress. Analysts viewed his comments as dovish. Powell mentioned that if the labor market weakens unexpectedly, the Fed would act accordingly, but he refrained from commenting on a potential rate cut in September. He emphasized the Fed’s progress in fighting inflation and the need to make cautious decisions to avoid moving too slowly.
Following Powell’s remarks, gold prices rose sharply, hitting an intraday high of $2,336.87 per ounce. Phillip Streible, chief market strategist at Blue Line Futures, stated that the market remains highly sensitive to any comments about interest rates or Fed policy, indicating a wait-and-see momentum.
The release of U.S. job vacancies data led to a significant drop in gold prices. May JOLTs job openings increased to 8.14 million, exceeding economists’ expectations of 7.91 million and the previous value of 8.059 million. This surge in job openings suggested a strong labor market despite high interest rates. Gold prices recovered later, closing at $2,329.14 per ounce, down 0.1% for the day. Erik Bregar, head of foreign exchange at Silver Gold Bull, remarked that Powell’s comments were slightly dovish, impacting the dollar. He added that the market was cautious about the JOLTS report, noting that April numbers were revised down, causing the market to initially react cautiously.
FXStreet analyst Christian Borjon Valencia observed that gold prices slipped during Tuesday’s North American trading session as market participants digested Powell’s comments. Despite Powell’s dovish stance, U.S. Treasury yields remained high, reducing the appeal of non-interest-bearing gold. Benchmark 10-year U.S. Treasury yields hit a one-month high on Monday and remained elevated on Tuesday. Valencia noted that higher-than-expected job openings indicated a resilient labor market. Upcoming data releases, including the minutes of the last Federal Open Market Committee (FOMC) meeting and service sector PMIs from S&P Global and the Institute for Supply Management (ISM), will be closely watched. The market’s attention will then shift to Friday’s non-farm payrolls data, crucial for assessing the labor market’s strength.
The U.S. non-farm payrolls growth is expected to slow to around 190,000 in June, with the unemployment rate stabilizing at 4%. According to the CME’s “Fed Watch” tool, the probability of a 25 basis point rate cut in September has risen to 63%, up from 58% on Monday. Valencia suggested that gold prices are biased to the upside but remain in a consolidation phase around $2,320-$2,350 per ounce. Despite a bearish chart pattern, momentum has turned neutral, with the Relative Strength Index (RSI) close to the 50 neutral line, indicating a balance between buyers and sellers. For the bearish trend to continue, sellers need to push gold prices below $2,300 per ounce. If successful, the next support levels would be the May 3 low of $2,277 per ounce, followed by the March 21 high of $2,222 per ounce. Further declines could target $2,170-$2,160 per ounce. Conversely, if gold prices break above $2,350 per ounce, buyers will aim for key resistance levels such as the June 7 high of $2,387 per ounce, with an eventual target of $2,400 per ounce. 
