Gold prices staged a rebound on Thursday, with the metal pushing higher from the Asian open. After the spot price established a solid footing above the 4430 level during the midday session, short positions were abandoned in favour of going long. The advance continued through the European session before accelerating into a surge during US trading hours, ultimately reaching an intraday high of 4510. Profitable longs were closed near 4480, locking in gains that more than offset earlier losses. The session concluded with gold settling at 4472, marking a second consecutive daily gain.

The primary catalyst late Thursday came from Federal Reserve Governor Christopher Waller, who signalled that if August inflation data continues to show progress, he would lean toward supporting a hold on rate cuts at the September meeting. That commentary promptly shifted market pricing, with the probability of a September cut dropping from roughly 63% to 50.2%. Gold responded immediately, pushing higher on the back of the shifting expectations.

Where the Real Action Lies

Tonight's nonfarm payrolls report is the genuine main event. Market consensus anticipates August payroll growth in the range of 53,000 to 56,000, with the unemployment rate holding steady at 4.1%, following an upwardly revised decline of 23,000 in the prior month. Should the headline figure blow past 100,000, with unemployment holding firm and average hourly earnings coming in hot, rate hike expectations would gain fresh momentum, putting near-term pressure on gold. The 4400 support level could come under serious threat, with the next downside target sitting in that vicinity.

A print landing between 30,000 and 70,000, with unemployment remaining at 4.1%, represents the scenario most closely aligned with current market pricing. Gold may experience some initial whipsaw, but the broader narrative would largely revert to the interplay between interest rates and oil prices, keeping the metal locked in a rangebound pattern.

The third scenario carries the most explosive upside for bullion: another negative payroll reading combined with unemployment climbing toward 4.3%. Such an outcome would directly challenge September rate-cut expectations and prove distinctly bullish for gold. In that event, the first upside target sits at 4530-4550, with the 4600 mark serving as the next major objective.

Avoid Predicting Direction Ahead of the Data

From a technical standpoint, gold is likely to trade in a cautious, elevated consolidation pattern today. Resistance looms at the 10-day moving average zone of 4500-4510, while initial support can be found at the hourly-level 4460 area. More significant downside protection rests at the 5-day moving average near 4430. The ultimate direction and optimal trade strategy will only become clear once tonight's employment figures hit the tape.

It bears emphasising that the first 5-10 minutes following the release represent the period of maximum emotional volatility, widest spreads, and most abundant false signals. Seasoned traders would be wise to let that initial surge or selloff play out fully before assessing the strength of any pullback or rebound. Position sizing should remain conservative, and no directional bets should be placed before the data is released. Waiting for confirmation of a clear trend before entering will dramatically improve your win rate.

For intraday positioning today, the recommended approach is a short entry in the 4478-4480 zone, with a stop loss at 4500, targeting 4400-4380 and trailing lower if broken. Should the data prove bullish and price decisively reclaims the 4500 level, the recommendation is to exit shorts and flip long, chasing the momentum higher in sequence.

Key Data Points to Watch Today

Friday, September 4th market calendar:

20:30 US August Unemployment Rate

20:30 US August Seasonally Adjusted Nonfarm Payrolls

20:30 US August Average Hourly Earnings (Year-over-Year)

20:30 US August Average Hourly Earnings (Month-over-Month)

22:00 US August Global Supply Chain Pressure Index