London — Gold managed to reverse its session and move into positive territory, trading around $3,360 per ounce, marking a modest yet meaningful gain of 0.3%. This increase came in response to a series of disappointing economic data from the United States, which has reinforced gold’s appeal as a safe-haven asset.
The release of the ADP report revealed particularly weak private job creation in May, with only 37,000 new jobs added—the lowest figure since March 2023. This slowdown, significantly below market expectations of 115,000 jobs, raises concerns about the strength of the U.S. labor market. While this figure contrasts with the optimism stemming from the previously released JOLTS job openings report, the mixed signals keep market focus firmly on the official Non-Farm Payrolls (NFP) report, due this Friday.
Additionally, the services sector also delivered negative signals. The ISM Services PMI dropped to 49.9 points in May, marking its first contraction since mid-2024. While mild, this decline suggests a cooling in a key sector of the U.S. economy, further reinforcing bullish sentiment around gold.
The international backdrop is also favorable for the precious metal. Trade tensions between the U.S. and China, despite recent temporary tariff reduction agreements, remain a persistent source of uncertainty. Recent mutual accusations of non-compliance between the two powers raise further doubts about global economic stability. The U.S. accuses China of strategic delays in rare earth exports, critical for technology and defense sectors, while China denounces new U.S. restrictions on sensitive technologies like semiconductors.
In this macro and geopolitical uncertainty, gold continues to hold near its all-time highs around $3,400 per ounce. From a technical standpoint, this level represents a critical resistance, identified by the 161.8% Fibonacci extension of its prior bullish structure. Breaking through this key threshold could spark a significant upside move toward more ambitious levels near $3,700 per ounce, according to monthly chart projections.
In summary, gold remains supported by a mix of disappointing domestic economic indicators and a tense global trade environment.”
*Analysis by Quasar Elizundia, Expert Research Strategist – Pepperstone
