Gold prices jumped on Wednesday, with August futures rising $19.50 to $3,382.80, as weak U.S. economic data weighed on the U.S. dollar and boosted rate cut expectations.
The U.S. Dollar Index (DXY) fell 0.43% after disappointing reports showed a slowdown in both services activity and private-sector hiring. ADP data revealed just 37,000 jobs added in May—far below forecasts—while the ISM Services PMI dipped into contraction territory for the first time in nearly a year.
These signs of a weakening economy have reignited hopes for a Federal Reserve rate cut, possibly as early as September. The CME FedWatch Tool shows a rising probability of easing, which could further support non-yielding assets like gold.
Meanwhile, Friday’s Nonfarm Payrolls (NFP) report is now in sharp focus. A lower-than-expected reading could intensify Fed cut bets and fuel further gains in XAU/USD.
Key Levels to Watch:
- Support: $3,350
- Resistance: $3,500 (April high)
- Breakout target: $3,603 and above
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