Technical analysis by AndyHopkins about Symbol PAXG: Buy recommendation (6/6/2025)

The Upcoming U.S. Nonfarm Payroll Data: A Pivotal Factor for Gold Prices at $3,355At the critical juncture where the current gold price hovers near $3,355, the upcoming release of the U.S. Nonfarm Payroll (NFP) data has undoubtedly become the focal point of market attention. The NFP data, short for U.S. Nonfarm Employment Population Data, is published monthly by the U.S. Department of Labor. It covers core information such as the number of employed persons in U.S. nonfarm sectors, the unemployment rate, and average hourly wages, wielding enormous influence on financial markets and capable of triggering in market sentiment.Historical Impact of NFP Data on Gold PricesThe NFP data has historically had an immediate and significant impact on gold prices. Take the June 2024 release as an example: the U.S. Department of Labor reported that nonfarm payrolls increased by 206,000 in June, exceeding the expected 190,000. However, the unemployment rate rose to 4.1%, higher than both the forecast and the previous month’s 4%. The unexpected rise in unemployment strengthened market expectations for Federal Reserve rate cuts, prompting investors to favor gold’s hedging and appreciation functions. Following the data release, both COMEX gold and London gold prices surged significantly.In contrast, on August 5, 2022, the U.S. announced that seasonally adjusted nonfarm payrolls increased by 528,000 in July, the largest monthly gain since February of that year and nearly double market expectations. Meanwhile, the July unemployment rate fell to 3.5%, the lowest level since February 2020. Immediately after this strong NFP data was released, precious metals futures plummeted: the main COMEX gold futures contract fell by over $25 per ounce during intraday trading.Current Market Context and NFP ExpectationsAgainst the backdrop of global economic uncertainties—including U.S. service sector contraction, poor employment data, tariff policies under the Trump administration that have heightened market anxiety, and tensions between major powers—market risk aversion is already at elevated levels. In this complex environment, the direction of the NFP data has become particularly critical.Market expectations project a 130,000 increase in nonfarm payrolls for May. If the actual data far exceeds expectations and the unemployment rate declines significantly, this would typically signal a strong U.S. economy, potentially reinforcing market expectations for Federal Reserve rate hikes. Higher interest rates would enhance the appeal of holding the U.S. dollar, prompting investors to sell gold in favor of dollar-denominated assets, thereby reducing gold demand and pushing prices lower.Conversely, if nonfarm payroll growth falls short of expectations and the unemployment rate rises, market expectations for Fed rate cuts will intensify. Lower interest rates reduce the opportunity cost of holding gold, while rising inflation expectations (with gold traditionally viewed as an effective inflation hedge) would attract significant investor inflows into the gold market, driving prices higher. For instance, on September 3, 2021, when the U.S. Department of Labor reported that August nonfarm payrolls fell far below expectations, the U.S. Dollar Index plunged rapidly, briefly 92 dropping below 92, and gold futures prices surged: COMEX gold futures rose by 1.02%.Conclusion: The NFP Data as a Double-Edged SwordThe upcoming NFP data could act as a double-edged sword, potentially breaking the current deadlock in the market’s bull-bear battle and triggering a new round of significant volatility in gold prices. Investors should closely monitor the NFP release and flexibly adjust their investment strategies based on the data outcomes to navigate the ever-changing market landscape.Non-agricultural data analysis, I hope it will be helpful to youXAUUSD BUY@3350~3355SL:3340TP:3390~3400