Mixed Economic Signals Leave Gold Waiting for Direction Amid Bull-Bear Tug-of-War

Spot gold traded with notable volatility, retreating from $3,405 resistance, breaking below $3,390, and accelerating lower before finding support at $3,380 and rebounding. This reflects cautious market sentiment as traders digest mixed economic data and shifting expectations.

Key Market Drivers1. Weaker Labor Market Lifts Rate-Cut Bets, but Signals Are Mixed

• Continuing jobless claims rose to 1.974M for the week ending July 26 — highest since Nov 2021 — signaling difficulty finding jobs.

[Continuing Jobless Claims – Source: ZEROHEDGE]

• Firms are slowing hiring but not aggressively cutting staff; initial claims remain low.

• Downward payroll revisions reinforce expectations of a September Fed rate cut.

• Yet, a New York Fed survey shows more workers willing to quit and a slight uptick in perceived job-finding probability, creating a nuanced labor picture.

2. Rising Inflation Expectations Complicate Fed Policy

• NY Fed July survey: 1-year inflation expectations up to 3.1% from 3.0%; 5-year up to 2.9% — highest since Feb; 3-year steady at 3.0%.

[U.S. Inflation Expectations – Source: ZEROHEDGE]

• Higher expectations may delay cuts as policymakers weigh tariff effects on prices.

• This sets up a dilemma: labor softness argues for cuts, inflation risk argues for holding. Markets await July CPI on Aug 12.

3. Household Credit Stress

• Q2 serious delinquency rate hit highest since early 2020, driven by student loan stress.

• More households face credit access issues and repayment concerns.

• Still, sentiment shows resilience: more expect financial improvement, fewer say theyre worse off vs. a year ago.

4. Risk-Off Sentiment and Data Credibility Concerns

• Weak labor data and uncertainty have supported gold as a safe haven. Post-data, gold rose, USD fell, 10-year yields dropped.

• BLS faces infrastructure and survey response issues, creating a “credibility gap” that prompts markets to treat initial data as provisional — adding a data reliability risk premium that supports gold.

Gold Outlook

Conflicting macro signals — labor weakness vs. rising inflation expectations — may keep the Fed cautious. Upcoming inflation data and Fed comments remain critical drivers.

[GOLD]

Current short setup differs from the earlier “sell on break below $3,390” approach.

• Right-Side (Higher Probability): Shorting after confirmed breakdown, following momentum.

• Left-Side (Lower Probability): Shorting into rebound from $3,380 fights short-term upward momentum.

Tactical shorts can be considered at $3,385–$3,390, with reduced size and strict stops.

Resistance: $3,390, $3,405

Support: $3,265, $3,345–$3,350, $3,380

Risk Disclaimer: The above analysis is for informational purposes only and does not represent the platforms position. Trade responsibly.