The economic calendar this week is heavily focused on the labor market: Monday features the July ISM Manufacturing PMI, Tuesday brings the JOLTS job openings report, Wednesday sees the ADP employment data and ISM Services Index, Thursday has weekly jobless claims, and Friday wraps up with the July nonfarm payrolls report. The strength or weakness of the labor market will directly influence how the market prices the Fed's policy path, which in turn drives the relative strength of the U.S. dollar versus gold.
On Monday, President Trump announced negotiations with Iran today, but Tehran's response has been noteworthy. The Iranian military directly called Trump's claim that "Iran requested a halt to attacks" a "new lie," emphasizing that its forces are "on the highest alert and prepared for all possibilities." This pattern of Trump first threatening strikes and then abruptly canceling them has been a hallmark of the US-Iran conflict for over five months. The diminishing marginal impact of this "crying wolf" rhetoric on the market is rapidly declining.
Additionally, the lingering hawkish influence from the Federal Reserve persists: three committee members supported a rate hike at the July FOMC meeting, September rate hike expectations remain above 60%, U.S. Treasury yields stay elevated, and the holding cost of non-yielding assets hasn't decreased, creating significant overhead selling pressure. This week features a data vacuum before the nonfarm payrolls report: Monday's session is light on data, with market focus shifting to the August 7th U.S. nonfarm payrolls and subsequent CPI figures. Short-term sentiment is cautious, with traders unlikely to push for a clear directional trend.
From a technical perspective, the daily chart shows a sharp rally followed by a retreat, leaving a long upper shadow. The RSI has turned down from overbought territory, suggesting a short-term focus on filling the gap and range-bound trading, not a trending move. Immediate resistance is at 4080-4085 (the gap high area), with stronger resistance at 4100-4110. On the downside, short-term support lies at 4045-4050 (the lower edge of the gap), with core strong support at the psychologically significant 4000 level.
In summary, gold's current price action is a tug-of-war between the emotional gap-up from easing geopolitical tensions and the overhead selling pressure from the Fed's hawkish stance. This is a news-driven, range-bound scenario, not the start of a trend. The 4000 level is a critical battleground for bulls and bears, while 4085-4100 acts as a near-term ceiling. Avoid chasing the gap and wait for a confirmed pullback before entering positions. For intraday trading, a short position is suggested at 4060-4065, with a stop loss at 4070 and a target of 4010-4000. Key economic data to watch today: Monday, August 3, 2026, at 21:45, U.S. July S&P Global Manufacturing PMI Final; 22:00, U.S. July ISM Manufacturing PMI; 22:00, U.S. June Construction Spending MoM.
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