Gold prices opened the week with a gap up, rising 0.3% to remain above the key level of $4,000 per ounce.
Gold is currently trading above the weekly pivot point of $4,054; if it manages to hold above this level, it could rise toward the first weekly resistance level of $4,112. Breaking above this level would likely lead to further gains, with the next resistance level at $4,178.
If gold fails to maintain trading above the weekly pivot point of $4,054, it will retest support levels near $3,987 then $3,929.
In terms of geopolitical tension, Attention is now turning to the Middle East, where U.S. President Donald Trump called off a bombardment of Iran over the weekend, hinting at the framework of a fresh deal to reopen the Strait of Hormuz.
And so goes what has become an increasingly common cadence of brinkmanship and de-escalation in a war Trump began in conjunction with Israel in February. Trump previously set aside plans for a major intensification of an American assault on Iran in late July, although tensions in the Middle East have remained high, with worries growing that the conflict may even be spreading to other parts of the region.
Trump said in a social media post that the latest decision to refrain from heavy military action was precipitated by requests from Iran and other Middle Eastern countries, adding that the “perimeters” of an agreement to unblock the Strait of Hormuz — a crucial waterway which Iran has effectively shuttered for months — had been secured.
Notably, media reports out of Saudi Arabia suggested that the country’s de facto ruler Crown Prince Mohammed bin Salman had urged Trump to consider the “necessity of prioritizing dialogue” in order to avoid an expanded war.
On the economic data front, Headlining the economic calendar this week will be the July U.S. jobs report, a figure which could sway the trajectory of Federal Reserve interest rate policy.
The U.S. economy is expected to have added 88,000 jobs last month, up from 57,000 in June, potentially suggesting unabated resilience in the American labor market. For months, incoming data has indicated that while employers are not hiring workers at an elevated clip, layoffs remain muted.
The unemployment rate is also seen at 4.2%, matching the prior month. However, recent numbers have suggested that Trump’s major immigration crackdown and more baby-boomer retirements have weighed on the number of available workers, with the size of the labor force declining by 720,000 from May to June. The participation rate, a gauge of the share of working-age people that are either employed or looking for a job, also sank to 61.5% in June, the lowest level since the COVID-hit days of March 2021.
Beyond the jobs data, figures gauging manufacturing and services activity from the Institute for Supply Management will be in focus.
ISM’s purchasing managers’ index, a tracker of the U.S. manufacturing sector, is tipped to come in at 54.0 in July, compared to 53.3 in the preceding month. A reading above 50 denotes expansion in manufacturing, which makes up a little over 9% of the American economy.