Gold consolidates after hitting a historical high of $3790: Multiple hawkish data suppresses, and the non-farm payroll week will set the tone for Fed rate cut expectations.

At the beginning of last week, driven by the increased safe-haven demand due to heightened geopolitical tensions, gold (XAU/USD) prices hit a historic high of nearly $3,790. However, mid-week, the combination of cautious policy remarks from Fed Chairman Powell and strong U.S. economic data (including Q2 GDP revised up to 3.8%, durable goods orders significantly exceeding expectations, and a surge in new home sales) exerted downward pressure, leading to a strengthening dollar index which caused gold prices to retreat to around $3,750 for consolidation. With the market widely anticipating another rate cut in October, investors will closely monitor the upcoming U.S. employment and manufacturing data to assess the Fed's next policy direction.

Geopolitical Hedging and the Strength of the Dollar: Long and Short Contest After Historical Highs

In the past week, the performance of gold reflected the intense battle between geopolitical safe-haven demand and the macroeconomic fundamentals of the United States.

· Geopolitical risks drive historical highs: As NATO forces intercept Russian aircraft and geopolitical tensions escalate, market risk aversion sharply increases, giving gold strong bullish momentum at the beginning of the week. XAU/USD rose over 1.5% on Monday and reached an all-time high of $3,791 in early trading on Tuesday. At the same time, XAU/EUR and XAU/GBP also hit new highs, indicating that funds are flowing out of euro and pound assets.

· Powell's cautious remarks triggered a pullback: Later on Tuesday, the strengthening dollar led to a decline in gold prices. Fed Chairman Powell reiterated in a speech on the economic outlook that he would ensure that "one-time price increases do not evolve into a persistent inflation problem," and stated that he would assess whether the policy is appropriate based on labor market, economic growth, and inflation data. This cautious tone provided support for the dollar.

· Strong U.S. data intensifies pressure: Subsequently released series of U.S. economic data further boosted the dollar. New home sales surged 20.5% in August on Wednesday, alleviating market concerns about real estate. On Thursday, the U.S. Bureau of Economic Analysis (BEA) revised the second quarter GDP annualized growth rate upward from 3.3% to 3.8%, along with a 2.9% increase in durable goods orders in August (far exceeding the market expectation of a decrease of 0.5%), and initial jobless claims falling to 218,000. These data collectively reinforced the bullish momentum of the dollar, forcing gold to consolidate around $3,750.

Market Focus: October Employment Data and Assessment of Fed Rate Cut Path

This week's US economic calendar will provide a range of high-level data, which will be key for the market to reassess the Fed's policy outlook and provide direction for the recent valuation of gold.

· The expectation for interest rate cuts remains, but has somewhat converged: CME Group's FedWatch Tool shows that the market generally expects the Fed to cut rates by another 25 basis points in October (bps). However, following the release of strong economic data, the market's expected probability of another rate cut in December has decreased from nearly 80% to about 60%. Powell and other decision-makers have previously acknowledged the rising risks in the labor market and explained that the rate cut in September was to offset these risks.

· Key indicators during the week:

1. JOLTS Job Openings (: The August data released on Tuesday, while a lagging indicator, could trigger immediate market reactions if the figures are significantly below 7 million or substantially above 7.5 million.

2. ADP Employment Change and ISM Manufacturing PMI: These two data points in the middle of the week are particularly critical. If the increase in private sector employment exceeds 70,000 and the ISM Manufacturing PMI recovers to above 50 in the expansion zone, the USD will continue to remain strong, and XAU/USD may face downward pressure.

· The impact of Friday's non-farm employment )NFP( data: The non-farm employment data released on Friday will be the peak of market volatility this week.

1. If the NFP disappoints again, it will solidify the market's expectations for the Fed to continue cutting interest rates in December, severely depressing the USD and US Treasury yields. In this dovish scenario, gold will gain strong bullish momentum heading into the weekend.

2. Conversely, if the NFP result exceeds 70,000 people, alleviating concerns about the labor market, the USD will extend its gains, and XAU/USD will face significant pressure.

Technical Analysis of Gold and Key Trading Levels

Despite the recent pullback, the overall technical outlook for gold remains bullish, although it faces the risk of an overbought correction.

· The bullish structure remains intact: The relative strength index )RSI( on the daily chart is still well above 70, indicating that gold is in a technically overbought zone. However, XAU/USD remains in the upper half of a nine-month ascending regression channel, and the trading price is well above the 20-day simple moving average )SMA(, suggesting that the bullish bias remains intact, but there is a possibility of a technical correction.

· Key support level:

First support level: $3,670 (the midpoint of the ascending regression channel, where the 20-day SMA is located).

Key support range: 3,500 - 3,480 USD (static level, integer point, 50-day SMA).

· Key resistance level:

First resistance range: 3,790 - 3,800 USD (historical high, round number).

Resistance at the upper channel: $3,860 (the upper limit of the rising channel).

Upper integer resistance: $3,900 (integer level).

Conclusion

Gold was driven by geopolitical risk aversion at the beginning of this week, successfully reaching a historic high, but then had to enter a consolidation phase in the face of the Fed's cautious policy signals and persistently strong U.S. economic data. The core contradiction in the market is: on one hand, the support for gold prices from risk aversion demand and interest rate cut expectations, and on the other hand, the pressure from a strengthening dollar due to economic resilience. Next week's non-farm payroll data will undoubtedly be the key to breaking the current balance, with its results either confirming the Fed's path towards further easing, boosting gold prices, or alleviating concerns in the labor market, allowing the dollar to continue suppressing gold prices. Investors, under the risk of overbought corrections, need to closely monitor the key support at $3,670 and the record resistance at $3,790.

Disclaimer: This article is for informational purposes only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make decisions with caution.