Spot gold prices closed higher on Wednesday, recovering from earlier weakness as softer-than-expected U.S. employment data and comments from Federal Reserve Chair Waller suggesting inflation pressures are easing helped lift sentiment in the precious metals market.
The gold market experienced significant volatility during the New York trading session. Following the U.S. economic data and remarks from Fed Chair Waller, the price of gold staged a sharp rebound.
The price bounced from a session low near $4,012 per ounce, surging to as high as $4,115 before retracing most of those gains.
By the close on Wednesday, spot gold was trading at $4,031.32 per ounce, marking a 0.6% gain for the day.
Independent metals trader Tai Wong noted, "Gold put in a decent bounce on Wednesday. The weaker-than-expected ADP jobs report set the stage, and Fed Chair Waller's comments that inflation is coming down pushed Treasury yields lower, helping the moribund gold market rally sharply."
Wong added, "Unless the non-farm payrolls report on Thursday is exceptionally strong, gold may have at least put in a near-term bottom."
Market Odds for September Fed Hike Plunge After Waller's Remarks
Speaking at the European Central Bank's Central Banking Forum in Sintra, Portugal, Fed Chair Waller stated that the central bank would not provide "forward guidance" and would instead base future decisions on incoming economic data.
"We are not going to provide forward guidance. We are going to chart a new path to make better policy decisions," Waller said.
He also indicated that inflation expectations and the risk of overheating have diminished in recent weeks.
Waller's comments eased market concerns about the Fed aggressively tightening monetary policy further, putting pressure on the U.S. dollar and providing support for gold prices.
According to the CME FedWatch Tool, traders now see roughly a 65% probability of a rate hike in September, a significant drop from the 80% level seen on Tuesday.
As gold does not yield interest, its opportunity cost increases in a rising rate environment, which typically weighs on its price.
Focus Shifts to U.S. Non-Farm Payrolls Report
The latest U.S. economic data also supported the rebound in gold.
The ADP National Employment Report released on Wednesday showed U.S. private payrolls increased by 98,000 in June, below the economist forecast of 118,000.
Simultaneously, the U.S. ISM Manufacturing PMI for June fell to 53.3, also missing market expectations of 54.0 and down from 54.0 in May.
The weaker employment and manufacturing figures further undermined the dollar and heightened concerns about a slowing U.S. economy.
With U.S. markets closed on Friday for the Independence Day holiday, the June non-farm payrolls report is due for release on Thursday. The U.S. economy is expected to have added 110,000 jobs in June, while the unemployment rate is forecast to hold steady at 4.3%.
Analysts believe the upcoming jobs report will be a key catalyst for determining the Fed's future interest rate path and gold's near-term direction.
On the geopolitical front, an Iranian official stated that the U.S. and Iran held technical talks in Doha on Wednesday, seeking an agreement on shipping passage in the Strait of Hormuz and aiming to secure a lasting ceasefire.
Technical Outlook for Gold
FXStreet analyst Christian Borjon Valencia noted that gold's overall trend remains neutral but slightly bearish, evidenced by a pattern of lower highs and lower lows. While buying interest pushed the price above $4,100, the subsequent retreat suggests selling pressure at higher levels. The Relative Strength Index (RSI) indicates overall bearish momentum, but its upward slope suggests short-term selling pressure is easing.
Valencia stated that for a bullish reversal to materialize, gold needs to achieve a daily close above $4,100. A break above that level would target the June 22 high of $4,220, followed by a resistance trendline in the $4,280-$4,300 area. A move beyond these levels could see a test of the 50-day Simple Moving Average (SMA) around $4,425.
Valencia added that on the downside, initial support lies at the June 30 low of $3,941. A break below that level would find the next support at $3,900, followed by the swing low of $3,886 from October 28, 2025. A more pronounced decline could see the price test the $3,500 area, which was the intraday high on April 22, 2025, and now acts as a support level.
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