Dollar Rebounds While Gold Eyes $3,400 Break

The U.S. dollar rebounded from six-week lows reached on Thursday, as traders adjusted their positions ahead of high-impact macroeconomic data. The Dollar Index (DXY) climbed toward 104.15, supported by improving sentiment surrounding U.S.-China trade negotiations.

This modest rebound capped gold’s upside momentum, keeping prices below the psychologically important $3,400 level.

“Until gold closes decisively above $3,400, bulls may remain hesitant,” said David Lennox, a market strategist at Fat Prophets. “The market is looking for confirmation that inflation and labor weakness will force the Fed’s hand.”

Fed Rate Cut Bets Hinge on Job Growth Slowdown

The spotlight now shifts to the U.S. employment report. Economists polled by Reuters expect nonfarm payrolls to have risen by 130,000 in May, down from April’s 177,000 gain. The unemployment rate is expected to hold steady at 4.2%. A weaker-than-expected print could reinforce bets that the Federal Reserve will begin cutting rates as early as September.

CME’s FedWatch tool currently prices in a 72% chance of at least two 25-basis-point rate cuts by year-end. Recent soft labor data, including higher-than-expected jobless claims and slowing wage growth, underpin that dovish tilt.

Gold and silver—both non-yielding assets—remain highly sensitive to rate outlooks. A softer jobs number may offer the breakout trigger precious metals need to clear current resistance levels. Until then, prices are likely to remain range-bound as markets await clarity.