Gold Hovers Around $3,650 as Markets Await Critical NFP Revision

Gold continues its relentless climb, touching a fresh all-time high near $3,660 on Tuesday before settling around $3,650, up about 0.50% for the day. This marks the third consecutive day of gains as the precious metal pushes into uncharted territory.

I've been watching this rally with fascination - it's not just about inflation hedging anymore. The weakening US Dollar has made gold more attractive for international buyers like myself, while disappointing US labor market data has practically cemented expectations for a Fed rate cut at the September meeting. The smart money is fully pricing in at least a 25 basis point reduction, with some even betting on a more aggressive 50 bp move.

What's particularly interesting is how central banks keep steadily accumulating gold reserves. They're clearly diversifying away from dollar assets, and who can blame them? Growing trade tensions from potential US tariffs combined with broader geopolitical uncertainties have only strengthened safe-haven demand. The political pressure on the Fed's independence isn't helping market nerves either.

Today's focus shifts to the US Nonfarm Payrolls benchmark revision at 14:00 GMT. Early whispers suggest we could see a massive downward adjustment erasing up to 800,000 jobs - a staggering number that would dramatically reshape the labor market narrative. Such a revision would confirm the US economy is cooling much faster than initially reported, giving gold bulls even more reason to charge ahead.

On the technical front, gold is showing some signs of exhaustion. The RSI on the hourly chart reveals a bearish divergence - prices making higher highs while momentum indicators record lower highs. This suggests we might see a brief consolidation phase before the next potential leg higher.

Support sits at $3,640, with the 50-hour SMA at $3,613 providing additional cushioning. A sustained break above $3,660 could quickly send prices toward the psychologically important $3,700 level.

With the PPI data due Wednesday and CPI figures coming Thursday, volatility could increase as traders position themselves ahead of next week's critical Fed meeting. Any inflation surprise could temporarily derail gold's ascent, but the medium-term outlook remains decidedly bullish given the confluence of supportive factors currently in play.