Gold Prices Consolidate as US Employment Data Shows Modest Growth

The February Nonfarm Payrolls (NFP) report showed that the US economy added 151,000 jobs, slightly missing expectations but still surpassing January’s growth. This modest job growth reflects an annual increase of 1.1%.

Moreover, employment in cyclical sectors, including manufacturing, construction, and warehousing, continues to rise. However, the average weekly hours fell to 34.1, which can signal a slowdown and potential layoffs in the near future. Despite this, wages have grown steadily above 4%, contributing to ongoing inflationary pressures. Gold (XAU) prices continue to consolidate in the $30 range after the release of employment data on Friday. However, the US dollar hit the support level of 103.50.

Federal Reserve Governor Adriana Kugler noted that hiring is still above the breakeven point, though uncertainty remains a challenge for the economy. Despite this, she emphasized that wages are not a major inflation driver. In response to economic conditions, Fed Chair Jerome Powell stated that the central bank is not rushing to lower interest rates. He acknowledged that the path to 2% inflation may be bumpy, and the Fed will not overreact to isolated data points.

On the other hand, central banks continue to buy gold as a hedge against economic uncertainty. The People’s Bank of China (PBoC) increased its gold holdings by 10 tonnes in the first two months of 2025. However, the largest buyer was the National Bank of Poland, which purchased 29 tonnes of gold, its largest purchase since June 2019.

Gold (XAU) Technical Analysis

Gold Daily Chart – Price Consolidation

The daily chart for gold shows that the price is consolidating in the orange zone and showing signs of strength. The rebound from the mid-line of the ascending channel was carried out from the mid-line of the RSI, indicating strength. The key support remains at $2,800. A break above $2,950 will open the door for the $3,000 level.

Gold 4-Hour Chart – Broadening Wedge Pattern

The 4-hour chart for gold shows the formation of an inverted head and shoulders pattern within a broadening wedge. The inverted head and shoulders indicate bullish price action and highlight the possibility of an upward breakout. A break above $2,930 will keep gold rising in the upward trend.

Treasury Yields (TNX) Technical Analysis

10-Year Treasury Note Yield Daily Chart – Rebound from Support

The daily chart for US Treasury yields shows that the yields are rebounding from the strong support at 4.10%. The yields remain above the 200-day SMA and show a bullish trend. The RSI also rebounds from the oversold level on the daily chart, indicating that the yields can continue higher.

10-Year Treasury Note Yield 4-Hour Chart – Support

The 4-hour chart also highlights the strong support at 4.10%, with the yield heading higher. The RSI rebounded from the oversold levels, indicating the possibility of a continuation of the upward move.

US Dollar (DXY) Technical Analysis

UD Dollar Daily – Bearish Pressure

The US Dollar Index continues within bearish pressure and has hit the support at 103.50, while the US dollar index enters oversold levels. The index has broken below the 200-day SMA, which indicates the continuation of the downward trend if 103.50 is broken. A break below 103.50 will extend the downward trend to 100.65. However, a rebound from 103.50 is expected.

US Dollar 4-Hour Chart – Descending Channel

The RSI on the 4-hour chart indicates that the US Dollar Index is extremely oversold. The index may rebound from 103.50, as the daily chart shows this level as strong support. As long as the index remains below the 107 level, it is likely to continue lower.